WT/TPR/M/316/Add.1
22 September 2015
(15-4871) Page: 1/125
Trade Policy Review Body Original: English/Spanish 29 June and 1 July 2015 anglais/espagnol inglés/español
TRADE POLICY REVIEW
NEW ZEALAND MINUTES OF THE MEETING Addendum Chairperson: H.E. Mr. Atanas Paparizov (Bulgaria)
This document contains the advance written questions and additional questions by WTO Members, and replies provided by New Zealand.1
Organe d'examen des politiques commerciales 29 juin et 1 juillet 2015
EXAMEN DES POLITIQUES COMMERCIALES
NOUVELLE-ZÉLANDE COMPTE RENDU DE LA RÉUNION Addendum Président: S.E. M. Atanas Paparizov (Bulgarie)
Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par Nouvelle-Zélande.1
Órgano de Examen de las Políticas Comerciales 29 de junio y 1 de julio de 2015
EXAMEN DE LAS POLÍTICAS COMERCIALES
NUEVA ZELANDIA ACTA DE LA REUNIÓN Addendum Presidente: Excmo. Sr. Atanas Paparizov (Bulgaria)
En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por Nueva Zelandia.1
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.
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CONTENTS
CANADA ...... 3 MALAYSIA ...... 9 AUSTRALIA ...... 10 HONG KONG, CHINA ...... 12 CHINA ...... 18 SWITZERLAND ...... 28 INDIA ...... 33 CHINESE TAIPEI ...... 42 MEXICO ...... 56 COLOMBIA ...... 61 THE EUROPEAN UNION ...... 74 SINGAPORE ...... 84 JAPAN ...... 87 UNITED STATES ...... 89 BRAZIL ...... 95 CHILE ...... 99 COSTA RICA ...... 102 TURKEY ...... 104 PERU ...... 113 REPUBLIC OF KOREA ...... 119 THAILAND ...... 122
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CANADA
Government Report (G316)
Part 2. KEY DEVELOPMENTS IN ECONOMIC POLICY; Current Economic Priorities: paragraph 2.1, page 3:
It is noted that consumer price inflation (CPI) remains modest in 2014.
1. Could New Zealand explain whether the changes in prices of pharmaceuticals are above or below the overall inflation level of the country, and whether any steps are taken to regulate the change in prices of pharmaceuticals?
New Zealand does not regulate pharmaceutical prices. The government does not routinely collect data on the relationship between inflation and these prices.
2. Could New Zealand explain whether the wholesale and pharmacy margins of pharmaceuticals are regulated in NZ?
New Zealand does not regulate pharmaceutical prices. The Government does not routinely collect data on the relationship between inflation and these prices.
Part 7. BILATERAL AND REGIONAL TRADE AGREEMENTS; (7.1) Australia New Zealand Closer Economic Relationship: paragraph 7.10, page 15:
Australia and New Zealand continue to work closely on a range of issues to progress the SEM agenda. A broad range of SEM initiatives have been achieved across the following four themes:
i. Reducing the impact of borders – focusing on reducing barriers to trade, travel and investment (e.g. the enactment of the 2013 CER Investment Protocol);
ii. Improving the business environment – reducing barriers to trade by streamlining regulatory frameworks (e.g. the enactment of an updated Double Tax Agreement in 2010 – due for further review in 2015);
iii. Improving regulatory effectiveness – finding ways for regulators to operate more effectively (e.g. the Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty, which allows the enforcement of civil judgements across the Tasman); and
iv. Supporting business opportunities – facilitating connections between businesses to take advantage of openness in trans-Tasman markets (e.g. the annual Australia New Zealand Leadership Forum).
3. As part of the Trans-Tasman patent attorney regime, how will New Zealand transition their approaches to the application of privileged communications with patent and trade-mark agents in order to adhere to the Australian model?
The Arrangement between the Government of Australia and the Government of New Zealand Relating to Trans-Tasman regulations of Patent Attorneys sets out how the Trans-Tasman patent attorney regime (the Arrangement) is to be implemented. (http://www.med.govt.nz/business/intellectual-property/pdf-docs-library/proposal-for-trans- tasman-regulation-of-patent-attorneys/Bilateral-arrangement-signed-March-2013.pdf) The Arrangement does not cover harmonisation or alignment of the protection to be provided for communications between a patent attorney and his or her client. Neither Australia nor New Zealand will, therefore, be making any changes to the existing protections afforded to communications between patent attorneys or their clients.
New Zealand does not provide protection for communications between trade mark agents and their clients, unless the trade mark agent is also either a lawyer or registered patent attorney, and if the communication was intended to be confidential and made in the course of, and for the purpose of,
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- 4 - the person obtaining professional legal services from the legal adviser, or the legal adviser giving such services to the person.
4. What will be the effect on the New Zealand Intellectual Property Office and the New Zealand Institute of Patent Attorneys from adopting Australia's oversight mechanisms (i.e. code of conduct and disciplinary process)?
The effect on the Intellectual Property Office of New Zealand and New Zealand Institute of Patent Attorneys, Inc. is anticipated to be minimal, if any. The majority of New Zealand's patent attorneys are already registered to practise in Australia and, therefore, subject to Australia's existing oversight mechanisms.
Extension of Australia's oversight mechanism to New Zealand will provide a more accessible procedure for addressing complaints about behaviour and actions of patent attorneys, compared to what is currently available in New Zealand.
5. How will privileged communications with patent and trade-mark agents apply to third parties both nationally and at the international level?
Section 54 of the Evidence Act 2006 (http://www.legislation.govt.nz/act/public/2006/0069/latest/DLM393659.html?search=ta_act_E_a c%40ainf%40anif_an%40bn%40rn_25_a&p=2) provides privilege for communications between patent attorneys and their clients where the communication is intended to be confidential and made in the course of, and for the purpose of, the client obtaining professional legal services from the patent attorney or the patent attorney giving such services to the client. Privilege applies to communications in respect of both local patent attorneys and overseas patent attorneys whose functions correspond to those a New Zealand registered patent attorney.
Third parties are not, therefore, able to use New Zealand's court procedures to gain access to privileged communications between a patent attorney and his or her client.
As noted above, privilege is not conferred on a client for their communications with their trade mark agent unless the trade mark agent is also a lawyer or registered patent attorney.
Secretariat Report (S316)
SUMMARY: paragraph 16, page 7:
It is noted that government procurement amounted to 20% of GDP in 2012.
6. Canada would like to know what percentage of purchases of pharmaceuticals in New Zealand is conducted by government entities (i.e. central as well as sub-central government entities).
The government does not collect detailed data on the private market, which companies consider to be commercially sensitive. As would be expected in a publicly-funded health system, public expenditure does make up the most significant proportion of the total purchases of pharmaceuticals in New Zealand. In terms of the total public spend, which is around NZ$1 billion per annum, hospitals account for about 25 per cent, other government agencies around 5 per cent and pharmaceuticals funded in the community via PHARMAC account for the rest.
Part 3. TRADE POLICIES AND PRACTICES BY MEASURE; Overview: paragraph 3.6, page 39:
It is noted that recent independent studies have found low levels of competition in some industries.
7. Could New Zealand provide an assessment of the level of competition in the pharmaceutical sector, particularly with respect to its impact on consumer choice between various therapeutic alternatives?
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The pharmaceutical sector in New Zealand is competitive. There are three basic components to it – the private direct to consumer market for both prescribed and over the counter pharmaceuticals, PHARMAC's management of both pharmaceuticals procured by public hospitals and the listing and reimbursement of community medicines and procurement by other government agencies (including the Defence Force, Accident Compensation Corporation (ACC), Corrections Department and Work and Income (WINZ)). All are subject to competitive principles and New Zealand's generic competition legislation (the Commerce Act 1986) applies to the Crown and to all Crown corporations to the extent they engage in trade. There are regulatory requirements to demonstrate safety, efficacy and quality, but they follow international standards and norms. New Zealand is subject to the constraints of any small market, in that pharmaceutical companies may choose not to bring products to market for commercial reasons, and this may limit the range of products available to consumers. However, it appears that a broad range of products are available on the private market and we do not see significant delays in those products coming to New Zealand from other markets. There is a liberal advertising environment that allows for direct to consumer advertising. New Zealand also has a small but growing domestic industry. Complementary medicines are largely unregulated at present, but a regulatory regime is planned for the future.
In relation to the public market, promoting competition is the main way that PHARMAC influences price and consequently improves the amount of pharmaceuticals the New Zealand government can subsidise. Competition enables lower consumer prices and better quality goods and services. Promoting competition is particularly important in the New Zealand market, because New Zealand represents only approximately 0.1% of the global pharmaceutical market.
PHARMAC aims to ensure that at least one medicine is fully subsidised in each therapeutic subgroup. This means that if there is a manufacturer's surcharge on a reference priced product or if it is not subsidised at all, then the consumer can choose to move to a fully subsidised option. In situations where a fully subsidised pharmaceutical is not clinically appropriate for a consumer, their clinician can apply to PHARMAC's Named Patient Pharmaceutical Assessment (NPPA) scheme to have funding considered for that particular individual.
Part 3. TRADE POLICIES AND PRACTICES BY MEASURE; Competition policy: paragraph 3.137, page 60:
It is noted that the Pharmaceutical Management Agency (PHARMAC) is responsible for determining whether drug products dispensed by community and hospital pharmacies are subsidized.
8. Could New Zealand explain whether the pricing and reimbursement negotiations between PHARMAC and pharmaceutical manufacturers include confidential price-volume agreements?
Yes. Contracts with pharmaceutical companies sometimes include a rebate on the cost of the medicine. Rebates are paid by the pharmaceutical company back to District Health Boards (DHBs) via PHARMAC. Rebates mean the price published in the Pharmaceutical Schedule can be higher than the actual net price paid by DHBs. Accepting a rebate arrangement means that DHBs can subsidise a pharmaceutical for an affordable cost and the supplier is able to shield its net selling price in New Zealand from exposure to international markets.
9. Could New Zealand explain the policy tools used by PHARMAC to control the prices of subsided pharmaceuticals during their product life cycle?
New Zealand operates on a willing buyer, willing seller basis, which means that PHARMAC does not directly control the price of pharmaceuticals through regulatory mechanisms. Promoting competition is the main way that PHARMAC influences price and consequently improves the amount of pharmaceuticals the New Zealand government can subsidise. Specific tools that PHARMAC currently utilises include the following:
• Tendering: PHARMAC promotes competition between generic pharmaceutical suppliers by running an annual tender. Typically the winning company gets to be the sole supplier of the subsidised pharmaceutical for a fixed term, usually three years. The contract with the supplier typically includes the requirement that they secure and maintain the supply of the medicine, and there are contractual consequences if they run out of stock. Currently nearly
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half of all subsidised medicines in New Zealand by volume are purchased and contracted for through the annual multi-product tender.
• Alternative commercial proposals: when PHARMAC consults publicly on the list of products they are intending to include in the annual tender, suppliers are able to submit alternative commercial proposals (ACPs) for the supply of any of those products. PHARMAC then decides whether the ACP is a better offer than the likely outcome achieved from tendering the product. Suppliers may choose to submit an ACP because they want to secure a confidential rebate on the product, to shield the net selling price in New Zealand from international markets, or because they want to secure a multi-product agreement (sometimes known as bundling). In a multi-product agreement, suppliers typically offer price reductions on older medicines they produce, in return for PHARMAC agreeing to subsidise a new product.
• Requests for Proposal (RFP): an RFP is an invitation for suppliers to submit a proposal to supply a specific pharmaceutical. PHARMAC uses RFPs when tendering is not appropriate, for example when special access criteria need to be met in order to get a subsidy.
• Rebates: as mentioned above, PHARMAC also sometimes contracts for confidential rebates, which mean the price published in the Pharmaceutical Schedule is higher than the actual net price paid by DHBs. Accepting a rebate arrangement means that DHBs can subsidise a pharmaceutical for an affordable cost and the supplier is able to shield its net selling price in New Zealand from exposure to international markets.
• Expenditure caps: expenditure caps are an effective way of sharing risk, and are particularly useful when PHARMAC knows there is uncertainty regarding the likely uptake of the product. If annual spending exceeds the limit agreed between PHARMAC and the supplier, the balance is refunded to District Health Boards.
• Reference pricing: reference pricing is where the government pays the same subsidy for medicines that have the same or a similar therapeutic effect. A supplier can set its selling price higher than the subsidy, however, this means the medicine will be partly-subsidised and the patient will have to pay the difference. PHARMAC aims to have at least one fully subsidised medicine in each therapeutic subgroup.
Part 3. TRADE POLICIES AND PRACTICES BY MEASURE; 3.4 Measures Affecting Production and Trade; 3.4.5 Government Procurement: paragraph 3.168, page 65; and paragraph 3.177, page 66:
The Secretariat report notes that the Parliamentary treaty examination process required for New Zealand to ratify the WTO GPA is underway. Canada is looking forward to the entry into force of the GPA for New Zealand and to our continued collaboration.
The report also notes that the Government Rules on Sourcing apply to procurement of goods or services or works for new construction works, when the maximum total estimated value of the procurement equals or exceeds the value threshold of NZ$10 million (excluding GST).
10. Assuming that New Zealand's threshold for construction services under the WTO GPA will be the same as the threshold of most GPA Parties (5 million IMF Special Drawing Rights), does New Zealand plan to review the scope of application of the Government Rules on Sourcing so as to ensure it captures all procurements covered under New Zealand's GPA terms of accession?
In implementing the provisions of the GPA and prior to deposit of the Instrument of Accession, New Zealand is updating its government procurement regulatory framework so that all entities included in New Zealand's final offer are required to comply with the GPA commitments at the thresholds (including the construction threshold) set out in the final offer as expressed in New Zealand dollars.
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Part 4. TRADE POLICIES BY SECTOR; 4.2 Agriculture, Forestry, and Fisheries; 4.2.2 Border Measures; 4.2.2.1 Import Measures, page 75, paragraph 4.17:
Footnote 7 on page 75 of the Secretariat Report states: "During the review period, the Commodity Levies Act was amended to allow for funding for a wheat producers' mutual insurance scheme."
11. Could New Zealand please explain why is there an exception to the use of producer levies on commercial and trading activities for wheat producers?
The Commodity Levies Amendment Act 1995 enables wheat growers to choose to fund from producer levies disaster relief insurance, where premiums are paid on delivery of the product and only on the tonnage delivered, rather than upfront. This ensures that all growers, regardless of size and seasonal production, can access disaster cover.
To reflect the cost of production, the level of insurance cover is required to be below the lowest expected value of wheat grain.
Like all commodity levy orders, growers vote every six years whether to continue paying the levy for this purpose.
Part 4. TRADE POLICIES BY SECTOR; 4.2 Agriculture, Forestry, and Fisheries; 4.2.2 Border measures; 4.2.2.2 Export Measures, page 75, paragraph 4.20:
The Secretariat report states that the kiwifruit industry is the only sector where export management measures still remain. It also states that Zespri has a quasi-monopoly on exports to markets other than Australia. Traders wishing to export kiwifruit to markets other than Australia must get prior approval from Kiwifruit New Zealand (KNZ) in order to export the fruit.
12. Could New Zealand please elaborate on the approval process which would allow traders to export kiwifruit without going through Zespri?
Any person may apply to Kiwifruit New Zealand to enter into collaborative marketing arrangements with Zespri Group Limited for the purpose of increasing the overall wealth of New Zealand kiwifruit suppliers. Applications from prospective exporters are assessed and decided on by Kiwifruit New Zealand, an independent regulatory body established under the provisions of the Kiwifruit Export Regulations 1999. Private traders can export kiwifruit to Australia without prior permission of Kiwifruit New Zealand and independent of collaboration with Zespri Group Limited.
The criterion applied to assess each application for a collaborative marketing arrangement is how well that arrangement will contribute to the purpose of increasing the overall wealth of New Zealand kiwifruit suppliers.
The only requirement in addition to contributing to an increase in the overall wealth of New Zealand kiwifruit suppliers is that the proposal must be a collaborative marketing arrangement with Zespri Group Limited.
13. Zespri maintains a quasi-monopoly (97%) on exports to markets other than Australia. Can New Zealand provide information on whether it has any plans to reform the current export management measures for kiwifruit?
There are no plans to reform the current export management arrangements for Zespri Group Limited. Zespri Group Limited receives no distorting subsidies, tax advantages, special financing, preferential access to foreign exchange or any other support from the New Zealand government.
Part 4. TRADE POLICIES BY SECTOR; 4.2 Agriculture, Forestry, and Fisheries; 4.2.2 Border measures; 4.2.2.2 Export Measures, page 76, paragraph 4.20:
14. Could New Zealand elaborate on the rate of approvals for all other traders wishing to Export kiwi fruit to markets other than Australia and elaborate on the service standards maintained by Zespri to provide these exporters with a timely response?
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Kiwifruit New Zealand, an independent regulatory body established under the provisions of the Kiwifruit Export Regulations 1999, is responsible for the assessment and granting of applications for collaborative marketing arrangements from exporters other than Zespri Group Limited.
Over the last five seasons, Kiwifruit New Zealand has received 149 applications for collaborative marketing arrangements. 138 applications have been approved, 11 applications have been declined.
As soon as practicable after receiving an application, Kiwifruit New Zealand must consider it and decide whether to approve a proposed collaborative marketing arrangement.
Kiwifruit New Zealand may, no later than 1 month after the commencement of each kiwifruit season, direct Zespri Group Limited to make a certain volume of kiwifruit available for collaborative marketing arrangements in that season.
Part 4. TRADE POLICIES BY SECTOR; 4.2 Agriculture, Forestry, and Fisheries; 4.2.4 Dairy industry restructuring, page 77, paragraph 4.27:
The Secretariat Report states that a number of significant amendments were made resulting in the Dairy Industry Restructuring (Raw Milk) Regulations 2012.
15. Is New Zealand optimistic that the revised thresholds for independent processor market share will be met in June 2015?
There is ongoing monitoring of the independent processor thresholds. The Minister for Primary Industries has written to all dairy processors to obtain information on the amount of milk solids collected from dairy farms over the 2014-15 season.
Once that information has been obtained, the Ministry for Primary Industries (MPI) will determine whether or not the threshold has been met.
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MALAYSIA
SECRETARIAT REPORT
Para 2.17, pg 29
New Zealand is committed to the multilateral trading system. The authorities are of the view that as a country dependent on international trade, New Zealand benefits from clear and transparent trade rules that are applicable to all Members. At the Bali Ministerial Conference in 2013, New Zealand reiterated that the WTO remains its main focus in its efforts to address the challenges that it faces as a trading nation, and to promote broad-based and inclusive growth. It has actively participated in WTO Trade Facilitation negotiations. However, it has not yet ratified the Agreement.
QUESTION
1. Appreciate if New Zealand could share with Members on its indicative timeframe to accept the protocol and deposit the instrument of acceptance of the TFA with WTO.
New Zealand is currently working to complete its domestic procedures to enable it to submit its instrument of acceptance of the Protocol. New Zealand expects to deposit its Notification of Acceptance of the Protocol in advance of the 10th WTO Ministerial Conference to be held in Nairobi in December this year.
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AUSTRALIA
Report by the Secretariat - WT/TPR/S/316
2 TRADE AND INVESTMENT REGIME
2.4.2 Regional trade agreements (RTAs) Page 31, Paragraph 2.25
Question 1 Since ANZCERTA delivered free trade in goods and services between Australia and New Zealand, how has the concept of "closer economic relations" been taken forward?
Since ANZCERTA was signed in 1983 and the Trade in Services Protocol was added in 1988, it has been progressively built on and modernised and is now made up of over 80 treaties, protocols and arrangements. ANZCERTA goes well beyond achieving free trade in goods and services. In 2004, under the Single Economic Market (SEM), Australia and New Zealand set the goal of a seamless experience across both countries, with an agenda to continue to move the concept of "closer economic relations" forward. Key elements of "closer economic relations" between Australia and New Zealand which go beyond trade in goods and services include: The 1998 Trans-Tasman Mutual Recognition Agreement (TTMRA) which allows anyone registered to practise an occupation in one country to practise in the other; The 1991 Food Standards Treaty, which creates common rules for food standards; The Trans-Tasman Travel Arrangement, which allows citizens from the two countries to visit, live and work in the other country without restriction; The 2013 Investment Protocol, which creates greater freedom and certainty for investment; A business law harmonisation program, begun in 2009 and due to be completed in 2015, and covers insolvency law, financial reporting policy, financial services policy, competition policy, business reporting, corporations' law, personal property securities law, intellectual property law, and consumer policy.
3 TRADE POLICIES AND PRACTICES BY MEASURE
3.4.5.3 Foreign Participation Page 66, Paragraph 3.177
Question 2 Why did NZ decide to change its long-standing position and negotiate accession to the GPA?
Factors that contributed to the decision to accede to the GPA included the increasing interest of New Zealand firms in participating in off-shore procurement markets, our already open, non- discriminatory procurement regime and information obtained from our experience since 2008 as an observer to the GPA.
4 TRADE POLICIES BY SECTOR
4.2.3 Domestic Support Page 76, Paragraph 4.23
Question 3 Can New Zealand outline the trade and agricultural policy reforms that have been undertaken to achieve an OECD Producer Support Estimate (PSE) of less than 1%, which ranks the lowest of all PSEs in the OECD?
New Zealand's general programme of economy wide reforms leading to the development of a more efficient, higher income and resilient economy began in the 1980s. Major reforms to the agriculture sector were critical to the success of this programme. For the agricultural sector the reforms included the phasing out of price support, tariffs, input subsidies and export assistance. They also included the provision of credit at market interest rates, and the introduction of cost
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- 11 - recovery for Government services. One of the primary objectives of the agricultural reform process was to create an international competitive agricultural sector: the removal of subsidies to individual farmers helped to achieve this by eliminating distortions within the sector, which had previously led to inefficient allocation between land uses and consequent surplus meat and wool production. These reforms enabled the sector to become responsive to consumer needs.
These reforms, along with the reduction in tariffs and elimination of quotas in the manufacturing sector, have meant that New Zealand's agricultural sector producers now pay market determined prices for inputs, and receive market prices for their produce. As a result the sector has had to adjust to changing market conditions, and adapt to stay competitive globally. This has led to producers operating smarter and becoming more efficient.
4.5.3.1 General features and market structure Page 90, Paragraph 4.98
Question 4 According to the report New Zealand has amended its telecommunications regulatory regime to facilitate structural separation of its incumbent operator, Telecom. Can New Zealand please explain how and why this was done and the resulting effect it has on competition within the sector?
The telecommunications sector has seen considerable regulatory change in recent years. In 2011, Telecom (now Spark) and Chorus demerged, each becoming a separate listed company. Prior to separation, Telecom was a vertically integrated company including network, wholesale and retail business units. The government's fibre investment programme, the Ultra Fast Broadband (UFB) Initiative, prohibited successful partners in the programme from providing retail telecommunications services. This was intended to facilitate open access and competition in the new network by removing incentives for wholesale operators to discriminate against competitors who operate at the retail level. Telecom chose to structurally separate in order to partner with the Government in the roll-out of the UFB network. Further details of the mechanisms for separation are outlined at: http://www.med.govt.nz/sectors-industries/technology- communication/communications/telecom-separation/structural-separation-of-telecom
New Zealand's telecommunications industry has experienced significant and unique industry change. With the structural separation of Telecom, Spark now provides retail communications services on the fixed network and mobile services. Chorus operates as a wholesale-only network operator, managing both the copper network and the bulk of the UFB network build.
As a result of structural separation, the challenges that many access regimes are trying to solve – competition with a vertically integrated operator with a strong presence in the retail market – are no longer relevant in New Zealand fixed-line markets.
The creation of Chorus as a completely stand-alone wholesale network operator means that New Zealand now has a level playing field amongst retail fixed-line operators. Strong, open access and non-discrimination obligations apply to Chorus and other providers in order to promote retail competition on these platforms. Investment in fixed-line markets is now occurring at high levels, supported by the government's investment in fibre and rural broadband through the UFB and Rural Broadband Initiatives.
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HONG KONG, CHINA
Questions on the Secretariat Report
Trade Policies and Practices by Measures
Safeguard Measures (WT/TPR/S/316: Page 7 para 11; Page 39 para 3.3; Page 51 para 3.68)
1. A new Trade (Safeguard Measures) Act was adopted in 2014, allowing for a timely imposition of safeguard actions and the inclusion of "public interest" criteria when imposing a safeguard measure.
Question: Could New Zealand elaborate on how the new "public interest" criteria work? Would there be quantitative and objective assessment? What are the observable improvements since the introduction of the criteria?
The Trade (Safeguard Measures) Act 2014 (the Act) requires that an investigation must consider the public interest, which may include (but is not limited to) consideration of the various factors listed in the Act. It is likely that in a safeguard investigation all of the factors listed in the Act will be considered along with any other factors that may be relevant in the circumstances of the case. The extent to which it is possible to make a quantitative assessment will depend on the circumstances of the case and on the information available. However, the likely effectiveness of a measure in assisting the industry and the likely effect of a measure on the market (including on consumers) are factors which are more likely to be susceptible to quantitative analysis while the other factors are more likely to require a qualitative analysis.
New Zealand has undertaken only a very small number of safeguard investigations and last carried out an investigation in 1995. It has therefore not been possible to observe whether the public interest test has led to any observable improvements.
State-owned Enterprises (WT/TPR/S/316: Page 7 para 15; Page 39 para 3.7; Page 64 para 3.157)
2. The New Zealand Government maintains equity shares in some 49 enterprises in key economic sectors such as energy and transport. The Treasury reviews the performance of these government-owned enterprises that may have full or partial commercial objectives. The level of government participation in such enterprises has been falling in recent years.
Question: Could New Zealand advise the reasons for the decrease in the level of government participation in the enterprises in recent years? What considerations does the Government have in maintaining government participation in these enterprises?
In 2013 and 2014, the Government sold 49% of its shareholding in three New Zealand electricity companies, and reduced its shareholding in Air New Zealand from around 73% to around 53%.
There were a number of economic and fiscal reasons for this, including to reinforce efficiency, to meet fiscal and capital market development policy goals, and to provide economic gains.
The reasons are set out in full in a number of papers on the Treasury's website at http://www.treasury.govt.nz/commercial/publications/information-releases/mixed-ownership- model/.
The most relevant papers are http://www.treasury.govt.nz/commercial/resources/pdfs/mixed- ownership-model/b11-2040013.pdf, http://www.treasury.govt.nz/commercial/resources/pdfs/mixed-ownership-model/t2011-336.pdf and http://www.treasury.govt.nz/commercial/resources/pdfs/mixed-ownership-model/mom-coce- dec10.pdf.
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The Government's policy is to keep 51% ownership of the three electricity companies and Air New Zealand, to ensure the Government has a controlling stake in the companies.
The Government maintains participation in state-owned enterprises to ensure it has a controlling stake in crucial infrastructure, and often the companies are monopoly assets best suited for public ownership. In addition, none of these entities are suitable for sale or partial sale, for a variety of reasons, including that they would not be appealing to take to the market and are not big enough to warrant a further sales programme.
Export Credit Insurance and Guarantees (WT/TPR/S/316: Page 58 para 3.122)
3. The New Zealand Export Credit Office (NZECO) provides trade credit insurance and financial guarantee products that complement those available in the private sector for exporters and banks. To be eligible for NZECO's guarantees, an exporter must be either a New Zealand registered company, or a subsidiary of a New Zealand registered company located abroad, and an economic benefit to New Zealand must exist from the transaction.
Question: Could New Zealand elaborate on the requirement of "an economic benefit to New Zealand"? How is it assessed? Are the applicants required to demonstrate its existence? Are there different requirements for different industries or sectors?
As part of NZECO's assessment of an export transaction, the applicant must demonstrate that there is an "economic benefit to New Zealand" in the goods or services that NZECO is underwriting. This can be demonstrated by showing New Zealand value-added content, either solely from the applicant itself or in conjunction with other New Zealand firms. This includes expenditure on New Zealand sourced or value-added materials, services (including design and IP) and labour, as well as profits. NZECO does not apply different requirements for different industries or sectors, and does not have a minimum value-added threshold.
Intellectual Property Rights (WT/TPR/S/316: Page 67 para 3.187)
4. In 2011, the Copyright (infringing sharing file) Amendment Act brought a significant change to the Copyright Act 1994 by providing rights owners with a special regime for taking enforcement action against people who infringe copyright through file sharing.
Question: How does the New Zealand Copyright Act define file sharing and under what circumstances is the provision applicable?
The provisions apply to copyright infringement that occurs via peer-to-peer file sharing networks. The definition of file sharing networks can be found in section 122A of the copyright act, as follows
File sharing is where - (a) material is uploaded via, or downloaded from, the Internet using an application or network that enables the simultaneous sharing of material between multiple users; and (b) uploading and downloading may, but need not, occur at the same time
What actions can rights owners take against those who share files and what are the procedures?
New Zealand's three notice regime permits rights owners to: Request that an internet protocol address provider (IPAP) sends up to three infringement notices to an internet account holder who is alleged to have infringed copyright via a file sharing network; Take a claim of up to $15,000 to the Copyright Tribunal after the notice process is complete.
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Further information on the process can be found here http://www.med.govt.nz/business/intellectual-property/copyright/notice-process-under-sections- 122a-to-122u-of-the-copyright-act-1994
Are there any exceptions or limitations to this new right for rights owners?
The regime does not provide a new right to copyright owners; it is simply an enforcement process in respect of existing rights. The usual copyright exceptions in the Copyright Act 1994 continue to apply.
Has there been any case law on this provision?
Yes. The number of infringement cases brought to the Copyright Tribunal since it entered into force is 21 (as of 8 June 2015). Awards made against infringers range from between NZ$276 to NZ$914. The first case was decided in 2013. Decisions are publicly available here: http://www.nzlii.org/nz/cases/NZCopyT/.
Has the New Zealand Government assessed the effectiveness of this provision in combating copyright infringement?
An initial assessment of the effectiveness of the regime was done when applicable fees were reviewed in 2012. The relevant document can be found here: http://www.med.govt.nz/business/intellectual-property/pdf-docs-library/copyright/notice- process/cabinet-paper.pdf.
This assessment suggested there had been a significant drop in piracy after the introduction of the regime. However, it noted a number of caveats around whether the regime itself was in fact the cause of this drop. No further assessments have been done.
Trade Policies by Sector
Banking (WT/TPR/S/316: Page 86 para 4.75)
5. We note that only entities whose business substantially consists of borrowing and lending money or providing other financial services may be registered as banks. The Reserve Bank of New Zealand (RBNZ) published an updated set of principles for considering the registration applications, taken into account both qualitative and quantitative criteria in the process.
Question: How often does the RBNZ update the set of principles for processing of registration applications? What factors has the RBNZ taken into account when updating the principles? Has the RBNZ consulted the industry before such updating exercises?
The RBNZ has not made any essential changes to its principles for considering applications for registration for a number of years. The restriction on the types of entity that can be registered (noted in the question) is set in primary legislation and has been in force since 1989.
However, the RBNZ document (Banking Supervision Handbook) BS1 "Statement of Principles: Bank Registration and Supervision" includes a number of other supervisory matters not directly connected to the registration process. For example, it includes the standard conditions of registration that apply to all existing registered banks (permitted under the RBNZ's primary legislation). These conditions are the main mechanism by which the RBNZ imposes regulatory requirements such as capital adequacy standards. The BS1 document therefore needs to be updated whenever changes are made to those regulatory requirements, which occurs quite regularly. It is worth noting that any applicant for registration will need to be able to meet those requirements from the date that it is registered.
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The RBNZ is in the process of reviewing all of its supervisory documents to ensure their clarity and consistency. It is likely that this will result in some changes in the way that the principles for registration are set out, although not in their substance. This work will take into account:
Recent changes to bank regulation and/or supervision in New Zealand (and where appropriate, internationally); The experience of entities that have applied for registration in recent years; and The importance of ensuring that the principles remain clear and transparent, and can be (as much as possible) easily applied by both applicants for registration and the RBNZ.
The RBNZ always consults with industry when making any material changes to any of it supervisory documents, and will do so in this case.
Insurance (WT/TPR/S/316: Pages 89 para 4.91)
6. Overseas insurers who have met all licensing, reporting and other prudential requirements may operate as branches in New Zealand. Nevertheless, the RBNZ has discretion to exempt foreign insurers from certain New Zealand requirements, if they are fully compliant with their home-country's law and regulation and the regulatory requirements and prudential supervision in their home jurisdiction are at least as satisfactory as those applied to New Zealand insurers.
Question: How often does the RBNZ exercise its discretion to exempt foreign insurers from certain requirements? Are there any guidelines or principles for the RBNZ to follow in considering the exemption?
Exempting foreign insurers from certain requirements occurs principally at the time of licensing. For most insurers, this occurred during the 2010 to 2013 transition period for the new prudential supervision regime, with a small number of new licence applications subsequently. The exemptions in place are also reviewed from time to time to ensure they remain appropriate. The strength of the home jurisdiction supervision is assessed in certain prescribed areas. These are set out in Insurance (Prudential Supervision) Act 2010 sections 19(3), 38(2) and 119(2). The RBNZ also has regard to the purposes and principles of the Act as set out in sections 3 and 4. The international jurisdictions with licensed insurers that have been assessed to be satisfactory are prescribed in regulation 5 of the Insurance (Prudential Supervision) Regulations 2010 (which is updated from time to time). Declarations and exemptions for individual insurers are published on the RBNZ website (http://www.rbnz.govt.nz/).
Transport (WT/TPR/S/316: Page 93 para 4.115 ; Page 96 para 4.131)
7. To achieve an effective, efficient, safe, secure, accessible and resilient transport system that supports New Zealand's growth and delivers prosperity to its citizens, the New Zealand Government issued a document titled "Connecting New Zealand" in 2011. "Connecting New Zealand" sets out the policy direction for the transport system for 2011-21 with three key themes: economic growth and productivity; value for money; and road safety. It refers to all transport modes, but makes emphasis on land transport, recognizing its essential role both in the domestic context and in enabling connectivity with air and sea ports, which are crucial for the country's international trade. Freight transport costs account for a sizeable proportion of international trading costs for New Zealand companies. A number of recommendations on international freight transport services were made in a performance report produced in 2012.
Question: We are interested in knowing more about the details of "Connecting New Zealand" and its latest progress. Can foreign invested companies participate in the projects under the programme, and if so, would they receive the same treatment as local companies? Is there any plan to review the programme? Furthermore, have the New Zealand authorities followed up the recommendations on international freight transport services made in 2012 (besides the recommendation to apply the Commerce Act to international shipping)?
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Connecting New Zealand is a document that summarizes the Government's broad policy direction for the transport sector. It is not directive and is not a programme in its own right. Its purpose is to assist stakeholder understanding of the Government's broad policy direction for the transport sector and enable stakeholders to consider this when they make their own investment decisions.
The Government's response to the Productivity Commission's inquiry into international freight transport services www.treasury.govt.nz/publications/informationreleases/transport/pdfs/resp- nzpc-ifts-dec12.pdf sets out the various areas where follow-up activity is being undertaken.
Maritime Transport (WT/TPR/S/316: Page 96 para 4.131)
8. The Shipping Act is considered as ineffective in regulating competition in the maritime transport sector. The New Zealand authorities are now seeking its Parliament's approval for applying the Commerce Act to international shipping, thereby removing the exemption for price-fixing and capacity-limiting agreements.
Question: What is the latest progress in seeking to apply the Commerce Act to international shipping? Will there be any transitional measures if the exemption is removed?
The Commerce (Cartels and Other Matters) Amendment Bill has been reported back to Parliament and is awaiting its third reading. Provisions of the Bill that relate to repeal of parts of the Shipping Act 1987 come into force two years after the Act receives Royal Assent.
(WT/TPR/S/316: Page 97 paras 4.135-4.136)
9. The Port Companies Act 1988 specifies governance, reporting and directorship requirements for port companies. The Act does not impose any limitation on the acquisition or holding of a port company, but acquisitions by overseas persons above the specified threshold would need prior consent under the Overseas Investment Act. In 2010, an independent study found that New Zealand's port ownership structure might have hindered productivity as well as the entry of experienced international port operators.
Question: We would like to know if "prior consent" for acquisition of port companies by overseas persons is a notification process or a screening process. If it is a screening process, what criteria are used for screening and what is the success rate in recent years? As the 2010 report has found that the port ownership structure might have hindered productivity, has any initiative been considered or undertaken to reform the ownership structure or attract foreign investment?
The acquisition of port companies by overseas persons would be subject to the Overseas Investment Act 2005, under which a transaction requires consent under the Act if it will result in an overseas investment in "sensitive land" or an overseas investment in "significant business assets". The Act specifies criteria for assessment of transactions that comes within either of those two categories. .
The New Zealand Productivity Commission considered the governance and ownership of New Zealand ports in the context of its wider international freight transport services inquiry (April 2012). The Productivity Commission report noted existing port owners should thoroughly consider relevant issues in the report before making decisions relating to ownership.
Tourism (WT/TPR/S/316: Page 98 para 4.140)
10. There is no tourism-specific legislation in New Zealand, but the industry is supported by a robust institutional framework and important public investment. The Tourism Policy Team, within the Ministry of Business, Innovation and Employment, is responsible for advising the Government on the appropriate settings to foster productivity, growth and the contribution of tourism to the economy. To boost innovation and productivity in the tourism sector, the Tourism Growth Partnership is created to invest in projects.
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Question: Grateful if New Zealand could share with us more details of the Tourism Growth Partnership. Could private sector, particularly companies with foreign capital, join the Partnership and/or participate in the projects under the Partnership? Are foreign invested companies enjoying the same treatment as local companies in the projects?
Section 4.1.b. of the Tourism Growth Partnership (TGP) guidelines states: "Offshore businesses are eligible to be co-investors [in TGP projects] provided they can demonstrate their proposed projects will generate sufficient benefit for New Zealand."
Therefore, as long as foreign-invested companies can show that their investment will benefit New Zealand's tourism sector (and, of course, the project meets the other TGP criteria), they are eligible to invest in TGP projects.
Further information on the TGP can be found at http://www.med.govt.nz/sectors- industries/tourism/tourism-growth-partnership.
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CHINA
Part I. Questions based on Report by the Secretariat (WT/TPR/S/316)
SUMMARY
Page 7, Para 13.
New Zealand maintains several business assistance and export promotion programmes. The main export promotion agency, New Zealand Trade and Enterprise, provides strategic advice, research and market intelligence for new exporters, as well as support for already established export companies. Export credit insurance is also available for exporting companies. Other incentive schemes are in place mainly to encourage innovation and capacity building.
Question 1: Does New Zealand have any corresponding policies and programmes to promote the export of trade in services? How effective are their implementation?
New Zealand Trade and Enterprise (NZTE) supports services exporters in the same way it supports goods exporters.
NZTE is the Government's international business development agency. NZTE helps New Zealand companies' international success by helping them boost their global reach and to build capability. NZTE uses its onshore and offshore networks to provide advice and expertise to firms working to export services. NZTE also works to provide marketing and networking opportunities for its clients through sponsoring trade shows, conferences, and through helping to organize trade delegation visits.
NZTE was established in 2003 and currently works with around 4,000 businesses, across a range of export sectors. NZTE has played an important role in the rise of services exports from $13.9 billion in 2003 to $17.7 billion in 2014. More information on the range of services that NZTE provides can be found at https://www.nzte.govt.nz/.
3. TRADE POLICIES AND PRACTICES BY MEASURE
Page 31, Para 3.5
"New Zealand maintains several business assistance and export promotion programs. The main export promotion agency, New Zealand Trade and Enterprise (NZTE), provides, inter alia, strategic advice, research and market intelligence for new exporters, as well as support for already established export companies. Export credit insurance is also available for exporting firms. Incentive schemes are in place mainly to encourage innovation and capacity building. "
Question 2: Please give details on the specific incentive policies and schemes that encourage innovation and capacity building.
Business R&D grants Callaghan Innovation's R&D Grants Programme provides three different grants designed to increase the amount of private sector R&D activity occurring in New Zealand. Foreign-owned companies can receive R&D grant funding, but the grants only fund research that is conducted in New Zealand.
• R&D Growth Grants are awarded to larger R&D performers. The public co-funding rate is 20 per cent of the company's qualifying R&D, capped at $5m per year. The grants are awarded on a non-discretionary basis (similar to an R&D tax credit) to applicants that spend at least $300,000 annually and 1.5% of revenue on R&D in New Zealand for at least two years. Total funding for Growth Grants is about $124m per year.
• R&D Project Grants will fund up to 40 percent of specific research projects. They are
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targeted at firms with smaller R&D programmes and those that are new to R&D. Total funding for Project Grants is about $35m per annum.
• R&D Student Grants provide opportunities for students and recent graduates to work within R&D active firms. Total funding for Student Grants is about $5m per annum.
Incubators and Accelerators Callaghan Innovation also funds privately-run incubator and accelerator programmes: Founder-focused incubators work with entrepreneurs to develop their business ideas. Technology- focused incubators identify a suitable intellectual property-based idea or technology and then work to build a business team around the IP. Public operational funding for both types is around $4m per year, and funding for tech-focused repayable grants is $10.2m a year.
The accelerator programme works with digital and ICT entrepreneurs to develop their ideas over 12 weeks into an investment pitch. Public funding for accelerators is up to $750,000 a year.
New Zealand has a range of programmes to encourage business innovation and research and development. Callaghan Innovation was established in 2013 to deliver these programmes and to connect businesses to researchers. Callaghan Innovation's activities include awarding business R&D grants (which co-fund between 20% and 40% of qualifying R&D) and funding privately-run incubator and accelerator programmes which work with entrepreneurs and start-ups.
Page 58, Para 3.122
"NZECO is currently located in the Treasury, and its obligations to third parties are guaranteed by the New Zealand Government. The Government's maximum liability under the scheme is NZ$740 million. To be eligible for NZECO's guarantees, an exporter must be either a New Zealand registered company, or a subsidiary of a New Zealand registered company located abroad; and an economic benefit to New Zealand must exist from the transaction."
Question3: Does the Government of New Zealand update its committed liability of NZ$740 million to NZECO every year? What is basis for the Government to approve the amount of liability? Is the amount of liability allocated to the national or industrial levels?
The $740 million liability maximum level is normally reviewed by the New Zealand Government every 3 years.
NZECO's insurance and guarantees are Minister of Finance guarantees sub-delegated to and issued by the Secretary to the Treasury pursuant to section 65ZD of the Public Finance Act 1989.
The total amount of liability is not allocated to specific industries, and NZECO's products are available nationally.
Page 58, Para 3.125
"NZECO also provides co-insurance (top-up cover) policies to support the private insurers' capacity."
Question4: How are the underwriting policies drafted when NZECO provides co-insurance? How does NZECO share rights and bear liabilities with private insurance companies upon an insurance claim?
In respect to its arrangement with Euler Hermes (Allianz), the standard terms of the NZECO Top-up Cover Policy are based on the standard terms of the Allianz primary trade credit insurance policy. The buyer-specific terms and conditions of NZECO's top-up cover will match the buyer-specific terms and conditions applied under its primary cover. A specimen NZECO Top-up Cover Policy is available on NZECO's website at: NZECO Top-up Cover Policy. With respect to its arrangements with other private insurance companies, NZECO issues its standard short-term trade credit policy. However its Policy Schedule describes how any losses are to be calculated and recoveries administered.
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NZECO has Claims Co-operation arrangements with each private insurer. NZECO retains the right whether to accept a claim in relation to their top-up layer of cover or not.
3.1.1 Customs procedures and requirements
Page 41, Para 3.17
Post clearance audit mechanisms.
Question 5: What kinds of businesses are covered in the "post clearance audit mechanisms"? Is a system similar to "proactive disclosure" included?
Customs responsibilities include testing and validating supply chain security and data integrity. As such, all businesses can be the subject of a post clearance audit. Customs uses a mixed model (comprising trade sectorial, risk and intelligence components) to select those businesses it will audit.
The Trade Assurance Strategy and Work Programme links with Customs' primary challenge of "make compliance easy to do and hard to avoid" and to intelligence-led risked based border management. As such Customs works with businesses to encourage proactive compliance/disclosure.
An example of this approach is proactive disclosure through the 'Uplift Programme'. There is a legislative requirement to collect revenue on royalties, annual pricing reconciliations and other such payments made post importation. Business practice allows for a calculated assessment to be added to the declared value on importation. This is usually in the form of a percentage added to the invoiced value of the goods on importation and is a mutually agreed arrangement between New Zealand Customs and the importer. Under the Uplift Programme, companies are encouraged to conduct an in-house review and report the results to Trade Assurance. Audit and testing of the reviews will be on a case-by-case basis and some may be accepted without prejudice. Further testing and more audit activity will be conducted based on risk.
Page 41, Para 3.18
As a result, less than 5% of import transactions are subject to further compliance checks or inspection, and 99% of compliant transactions are processed by Customs within 30 minutes of completion of an import declaration. NZCS does not maintain an Authorized Economic Operator(AEO) system, as the authorities seek to give simplified process to all importers
Question 6: According to the AEO Guide 2014 published by WCO, New Zealand signed mutual recognition arrangements with the U.S., Japan and Republic of Korea. Is it a one-way recognition? Does New Zealand have any plan to sign mutual recognition arrangements with other countries or regions in the near future?
New Zealand's Mutual Recognition Arrangements are consistent with the World Customs Organisation (WCO) Framework to Secure and Facilitate Trade, and associated guidelines on mutual recognition. New Zealand does not consider that mutual recognition arrangements allow for "one way recognition". As per the WCO guidelines, New Zealand's mutual recognition arrangements with other countries include provisions recognising the approval and validation process for each country's respective Authorised Economic Operator programme.
The WCO framework recognises that countries may establish AEO programmes for different streams of trade, and New Zealand maintains an AEO programme for exports (the Secure Exports Scheme).
New Zealand has no immediate plans to sign additional mutual recognition arrangements at this time, but in the near future will be exploring possible arrangements with other key trading partners.
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Question 7: How does Customs of New Zealand assess risks before the cargoes arrive? What are the major technologies, methods and standards for risk assessment?
All goods imported into New Zealand (except international mail) are screened electronically. This screening can be in various formats from the use of electronic manifests, which have lesser data sets, to an import entry with codified data fields. All of these formats require electronic lodgement through Customs' computer systems to undergo a risk assessment process.
The data lodged is screened automatically against rules/ profiles and alerts (collectively referred to as alerts) on Customs systems. Any entry that matches an alert is electronically forwarded to a work unit to be further assessed and the goods are held from delivery until that assessment is completed and a decision made on whether any further intervention is necessary. The assessment process will either see the goods cleared, directed for an inspections intervention, or documentation requested to verify the transaction / permit requirements (and possibly referred to a specialist team for further review). Goods not identified as requiring any further activity through this electronic screening are automatically released.
Alerts are generally used by Customs to identify cargo that is prohibited, restricted, or subject to duty. These alerts are generally matched against current priorities and known modus operandi and include alerts placed on behalf of other agencies, such as the Ministry of Business, Innovation and Employment (MBIE), regarding safety standards and the Police for firearms.
Alerts are created based on intelligence developed from known profiles, border interception information as well as domestic and global trend information and is maintained by intelligence analysts and reviewed periodically. An alert can only be created if it is peer reviewed and signed off, and this process includes an impact analysis to consider resource and process implications.
As international mail is not currently able to be screened electronically, it requires a physical presence at the NZ Post international mail centre facility in Mangere, Auckland. As mail is put through a sorting process, Customs and MPI officers manually examine all items, selecting items of interest for inspection. Customs also works with NZ Post staff to identify packages for inspection. MPI undertakes physical x-ray of all parcel mail and all mail is subject to screening by both Customs and MPI detector dogs.
3.3.2 Competition policy and price controls
Page 60, Para 3.135
New Zealand's competition regime continues to be governed mainly through the Commerce Act 1986 (the Commerce Act) as amended. It applies broadly across the economy, including the public sector. The New Zealand Commerce Commission (the Commerce Commission) is an independent statutory body with responsibility for enforcing the Commerce Act
Question 8: What kind of illegal activities are subject to the regulation of the Commerce Act in the competition sector? Please illustrate the main functions and the internal organization of the Commerce Commission.
The Commerce Act prohibits agreements that substantially lessen competition. It is considered that agreements that give one or more businesses more market power are agreements that lessen competition. A business with more market power can charge more or give less in terms of quality or service, without having to closely consider the possible reactions of its competitors, or the possibility of losing its customers to those competitors.
Other agreements that are illegal under the Commerce Act include agreements between competitors to exclude rivals (unless the agreement does not lessen competition), agreements that have the effect, or likely effect, of maintaining, controlling or fixing price and agreements relating to resale price maintenance.
It is also illegal for businesses with a substantial degree of market power to take advantage of that power for the purpose of restricting entry of a person into that or any other market, preventing or
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- 22 - deterring a person from engaging in competitive conduct in that or any other market or eliminating a person from that or any other market. Finally, the Commerce Act prohibits businesses from acquiring businesses or assets if the acquisition would have the effect of substantially lessening competition in a market.
The main functions of the Commission involve generally enforcing the Commerce Act and consumer protection laws (the Fair Trading Act (FTA) and the Credit Contracts and Consumer Finance Act (CCCFA)). Under the Commerce Act, the Commission enforces the prohibition on anticompetitive agreements and acquisitions, has the power to clear or authorize mergers and regulates markets where there is little or no competition. The Commission also enforces the FTA and CCCFA. The FTA prohibits false and misleading consumer information and the CCCFA sets out rules lenders must follow when providing credit to consumers.
The Commission is an independent Crown entity established under section 8 of the Commerce Act 1986. The Commission is not subject to direction from the government in carrying out its enforcement and regulatory control activities. The Commerce Commission's purpose is to achieve the best possible outcomes in competitive and regulated markets for the long-term benefit of New Zealanders.
The structure of the Commission can be found at this website: http://www.comcom.govt.nz/the- commission/about-us/commission-structure/
Page 62, Para 3.148
The Search and Surveillance Act 2012 amends the Commerce Act by aligning the Commerce Commission's powers with those of the main regulatory enforcement agencies. These provisions largely deal with procedural matters such as securing the 'scene', computer searches, and clarifying protection for legal privilege.
Question 9: Please introduce the Commerce Commission's procedures for investigating a competition case. What does the Commerce Commission's right to investigation include?
The Commerce Commission may investigate any conduct that it suspects breaches the Commerce Act.
Procedures for investigating
The Commission identifies matters that may warrant investigation through several methods, including complaints to its Contact Centre, referrals from other agencies, intelligence-gathering and analysis and matters coming to its attention that may be of concern.
The Commission then considers whether a matter warrants investigation. This involves considering whether there is a reasonable basis for suspecting a breach, its enforcement criteria and its competing priorities and current enforcement focus areas.
Once the Commission has decided to investigate a matter, the Commission gathers and analyses relevant information in order to determine what happened, whether what happened breaches the laws we enforce (in competition cases, the Commerce Act) and if it does, what the most appropriate enforcement response.
The Commission's information gathering process involves gathering information from relevant parties either voluntarily or through its compulsory information gathering powers.
Once the investigation team has completed its inquiries and assessed the available evidence, the investigation team presents to the relevant decision makers an assessment of whether there is a breach of the Commerce Act and if so, a recommendation on the most suitable type of enforcement response.
High-level enforcement responses, such as court action or settlements, are usually taken by a Division or the Commission sitting as a group.
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Lower-level enforcement responses, such as warnings and compliance advice letters, are typically taken by Commission managers.
4 TRADE POLICIES BY SECTOR 4.1 Agriculture
Question 10: Please introduce the policies for domestic dairy industry including support policies for Fonterra Co-operative Group and other dairy cooperatives and enterprises in New Zealand.
Fonterra and other dairy exporters receive no support from the New Zealand Government. For further information see paragraphs 3.149, 4.19, 4.25–4.27 of the Report by the WTO Secretariat for New Zealand's Trade Policy Review.
Question 11: Since 2011, there have been no restrictions on who can export dairy products, including milk powders, from New Zealand to designated tariff quota markets. New Zealand only administers exports licences for some agricultural products such as dairy in order to accommodate tariff- quotas imposed by some trading partners. Export licences are required to export certain dairy products to the United States, the European Union, Japan and the Dominican Republic.
In New Zealand Dairy cow breeding is a commercial activity. The viability of the New Zealand dairy industry is determined by prices set by the world market. The Dairy Industry Restructuring Amendment Act 2012 introduced a milk price monitoring regime aimed at improving transparency in Fonterra's farm-gate milk price setting process and controlling whether Fonterra's farm-gate milk price is consistent with a price that would otherwise emerge in a competitive market for farmers' milk. The Commerce Commission is in charge of monitoring and reporting every year on Fonterra's milk price.
The MPI allocates licenses for the export of certain volumes of dairy products to designated markets; allocation is based on the proportion of milk solids collected by each company in relation to the total import volume of the preferential tariff quota.
In recent years Fonterra's share in the allocation of export licences has decreased as new companies enter the market. Five New Zealand companies (other than Fonterra) were allocated export licences for 2015.
For further information see paragraphs 3.149, 4.19, 4.25 – 4.27 of the New Zealand Trade Policy Review.
4.5 Financial services
Page 121, Para 4.96.
The Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPA) requires any person or entity that provides financial services in New Zealand to register on a public register of financial service providers. Those supplying services to retail clients must also join an approved dispute resolution scheme.
Question 12: Please introduce the specific procedures and approaches of the "dispute resolution scheme".
Membership in a dispute resolution scheme DRS is mandatory for Financial Service Providers (FSPs) who provide a service to retail clients, because it provides consumers with an avenue for redress when a dispute arises with their financial service provider. Customers of a financial service provider can access the dispute resolution scheme that their FSP belongs to, free of charge. However, the complainant must take their complaint to the FSP first. FSPs need to have some internal procedures to deal with complaints. All dispute resolution schemes will have rules about the complaints process, what the FSP has to do, and what complaints they cover.
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Question 13: This chapter does not mention the securities sector. Please introduce the regulation and development of the securities sector in New Zealand.
Paragraph 4.94 describes the Financial Markets Conduct Act 2013 (FMCA) which regulates the securities sector in New Zealand. The main purposes of the Act are to • promote the confident and informed participation of businesses, investors, and consumers in the financial markets, and • promote and facilitate the development of fair, efficient, and transparent financial markets.
This new Act and its supplementary regulations replaced the previous securities legislation which was primarily contained in the Securities Act 1978 and the Securities Markets Act 1988. A discussion document on securities law was released in 2010, which initiated an extensive draft and consultation process prior to the commencement of the FMCA. The FMCA established, inter alia, a licensing regime for fund managers, independent trustees, derivatives issuers, and providers of crowd funding, peer to peer lending and discretionary investment management services. Subject to transitional arrangements, since 1 December 2014 it is not possible to perform any of these services without a license granted by the Financial Markets Authority.
The Financial Markets Authority regulates capital markets and financial services in New Zealand. It superseded the previous Securities Commission.
Part III. Other Questions
Question 14: Please introduce in detail the institutional design of skilled immigration and points system in New Zealand.
The Skilled Migrant Category is a points system based on factors such as age, work experience, qualifications, and skilled employment. Applicants must also be aged 55 or under, and meet English language, health, and character requirements. Points will be allocated for skilled employment if the applicant has a job or a job offer in New Zealand that requires specialist, technical, or management expertise. More points will be allocated if the job or job offer is in certain industries, or if the applicant's partner also has a skilled job or job offer. Applicants can also receive points for certain work experience, recognised qualifications, age, and close family with New Zealand residence or citizenship. More information as well as a points indicator and points table, which more clearly outline how points are allocated, can be found at the website: http://www.immigration.govt.nz/migrant/stream/work/skilledmigrant/.
FOLLOW-UP QUESTIONS FROM CHINA
Part I. Questions based on Report by the Secretariat (WT/TPR/S/316) 3.4.6 Intellectual property rights
Page 67, Para 3.187
In 2011, the Copyright (infringing sharing file) Amendment Act brought a significant change to the Copyright Act 1994 by providing rights owners with a special regime for taking enforcement action against people who infringe copyright through file sharing.
Question 1: Please elaborate on the special law enforcement regime provided to rights owners to take action against web copyright infringement through file sharing.
Answer 1: Sections 122A to U of the Copyright Act 1994 provide a three notice process for right holders to use when they consider an internet user has infringed their copyright via a file sharing network.
The notice process begins when a rights holder sends an allegation of copyright infringement to an Internet service provider (ISP). If an ISP receives allegations of infringement from a rights holder,
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- 25 - they are required to determine which of their account holders was using the internet at the time, based on their "internet protocol" (IP) address.
Once an ISP has determined which account holder the allegation relates to, they are required to send an infringement notice to that account holder. If an account holder receives three notices within 9 months that relate to the same rights holder, the rights holder may choose to take a claim for damages against the account holder up to a maximum of $15,000 to the Copyright Tribunal (Tribunal).
The rights holder is not required to use the three notice process to address infringements through file sharing. The right holder may, instead, pursue legal action against an account holder through the courts at any time either before or during the three notice process.
The process also provides two ways in which account holders can dispute infringement allegations: either directly with the rights owner, or if a claim is made, at the Copyright Tribunal.
Infringement Notices
There are three stages of infringement notice under the process. These are:
1) Detection notice 2) Warning notice 3) Enforcement notice
Notices last for 9 months from the date of the detection notice, or, from the expiry of an enforcement notice (whichever is the earlier).
On‐notice Period
If a notice is sent by an ISP to an account holder, a period of 28 days must pass before another one can be sent to the account holder. This is called the “on notice period”. While another notice cannot be sent during this time, the ISP must still match any further allegations of infringement from a rights holder in relation to the account holders IP address. These allegations will be included in any further notices, and will be considered by the Tribunal if a claim is made against the account holder by the rights holder.
Challenges
Infringement notices can be challenged by an account holder directly with the rights owner who sent them. The challenge must be made within 14 days of the date of the notice that the challenge relates to. Rights holders must also respond to the challenge (either accepting or rejecting it), via the ISP acting as an intermediary, within 28 days of the notice (e.g. the on‐notice period). If a rights holder accepts a challenge, or does not respond, the notice that the challenge relates to is cancelled.
Effect of expired or cancelled notices
Notices can either expire (after 9 months of the date of the detection notice) or can be cancelled due to a challenge.
If a notice expires, the process begins again. Any further infringements detected at the account holder’s IP address will result in a new detection notice.
If a notice is cancelled due to a challenge, previous notices remain in effect. For example, if a warning notice is cancelled, the detection notice remains in effect and any further infringements detected on the account holder’s IP address will result in a new warning notice.
Copyright Tribunal
If an enforcement notice has been sent, and has not been cancelled due to a valid challenge, the rights owner may choose to take a claim for up to $15,000 to the Copyright Tribunal. Tribunal claims are intended to be heard “on the papers”. On the papers means that claims will be decided
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- 26 - based on written arguments from both sides. However an account holder may request a hearing in person.
Account holders and right holders may only have legal representation at the Tribunal where the Tribunal agrees.
Page 67, 3.188
The Trade Marks Act 2002 was amended several times during the review period. The most significant amendment was made in 2011…The amendment also revised provisions regarding parallel importing, suspension of border protection notices, and removal of licensees on the Trade Marks Register.
Question 2: What are the revised provisions regarding parallel importing? What is behind the revisions? What is the impact on trademark registrants and interested parties?
Answer 2: What are the revised provisions regarding parallel importing? Section 97A of the Trade Marks Act 2002 provides for the international exhaustion of trade mark rights. It does so by stating that it is not an infringement of a registered trade mark to import and sell trademarked goods that have been put on the market anywhere in the world by the trade mark owner, by any person associated with the owner, or with the trade mark owner’s express or implied consent.
Section 97A Exhaustion of rights conferred by registered trade mark (1) A registered trade mark is not infringed by the use of the trade mark (including use for the purpose of advertising) in relation to goods that have been put on the market anywhere in the world under that trade mark under any 1 or more of the following circumstances: (a) by the owner; (b) with the owner’s express or implied consent; (c) by an associated person of the owner. (2) For the purposes of subsection (1)(c), a person is an associated person of the owner if— (a) they are in the same group of companies; or (b) they are both bodies corporate and they consist of substantially the same members or are directly or indirectly under the control of the same persons; or (c) either of them has effective control of the other's use of the trade mark; or (d) a third person has effective control of the use of the trade mark by each of them. (3) For the purposes of subsection (2), (a) group of companies includes a holding company and its subsidiaries within the meaning of section 5 (http://www.legislation.govt.nz/act/public/1993/0105/latest/DLM319999.html?search=ta_ac t_T_ac%40ainf%40anif_an%40bn%40rn_25_a&p=5#DLM319999) of the Companies Act 1993; and (b) a person has effective control of the use of a trade mark if that person may authorise the use of the trade mark or has significant influence over how it is used, regardless of how that authorisation or influence arises (for example, whether directly or indirectly and whether by way of proprietary interest, contract, arrangement, understanding, a combination of those things, or otherwise).
What is behind the revisions? The revision is intended to curtail the practice of some foreign trade marks owners, who in collusion with their New Zealand distributor/licensee, were making unjustified claims of trade mark infringement against legitimate sellers of parallel imported goods. Prior to the revision it was the practice of some foreign trade mark owners to assign their New Zealand trade mark registrations to their local distributors/licensees, after which the local distributor/licensee would then threaten legal action against the seller of legitimate parallel imported goods alleging they had breached their trade mark rights by importing goods obtained directly or indirectly from the foreign trade mark owner. The basis of the infringement claim was that the sale of the goods in question by the foreign trade mark owner has not been authorised by the local distributor/licensee. This practice was judged to be having a chilling impact on Government’s parallel importation policy.
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What is the impact on trademark registrants and interested parties? Complaints from the sellers of legitimate parallel imported goods about the practises of foreign trade mark owners and their local distributors/licensees making unjustified threats of legal action alleging trade mark infringement have ceased.
It is understood that there are no special GI registration and protection legislation in New Zealand, the GIs could be protected by trademark law in the form of collective and certification marks, in addition, be regulated by Fair Trading Act and counterfeit infringement lawsuits. The Secretariat Report stated that the Geographical Indications (Wine and Spirits) Registration Act 2006 establishes a registration system for wine and spirit geographical indications, which will be enter into force in 2016.
Question 3: Please specify the difference on the regime and level of GI protection between the Act and the trademark law which protects GI by way of collective and certification marks. How are the two regulations legally compatible?
Answer 3: A person can protect a GI in New Zealand by registering the GI as a collective or certification trade mark under the Trade Marks Act 2002. The trade mark owner has the exclusive right to authorise who can use the trade mark, and decide on terms and conditions of that use, and can take legal action against unauthorised use of the trade mark.
A person will be able protect a wine or spirit GI in New Zealand by registering the GI under the GI (Wine and Spirits) Registration Act 2006 (GI Act) (once it is in force). Under the GI Act a person may use a registered GI related to wine only if at least 85% of the wine is made from grapes harvested in the geographical area to which the GI relates. For a spirit GI, a person may use the registered GI in trade only if the spirit originated in the geographical area to which the GI relates. Under the GI Act any person may take legal action against someone who uses the registered GI in contravention of the GI Act.
Nothing prevents a person from registering a GI under the GI Act and also registering it as a trade mark under the Trade Marks Act, and from taking legal action under both Acts.
Page 71, Para 3.193
New Zealand is not party to the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.
Question 4: Does New Zealand have any plan to accede to the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty? If yes, is there any timetable?
Answer 4: The Government has not yet taken a decision on whether or not New Zealand is to accede to either the WIPO Copyright Treaty or the WIPO Performances and Phonograms Treaty.
Part III. Other Questions
Question 5: Are foreign investors establishing advertising companies entitled to national treatment in New Zealand? Are there any special stipulations in the regulatory and legal system of advertising industry in New Zealand? If yes, please introduce such regulations, especially the new ones promulgated since 2012.
Answer 5: An investor seeking to establish an advertising business in New Zealand would be required to seek consent to invest under the Overseas Investment Act 2005 if applicable requirements were triggered, including if the total expenditure to be incurred in establishing the enterprise exceeded $100 million. There are no other national treatment limitations applying to foreign investors establishing advertising companies in New Zealand.
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SWITZERLAND
Report by the Secretariat
1. Economic Environment 1.2 Recent Economic Developments
The report by the Secretariat notes in para. 1.34, which the primary sector continues to be the most important contributor to New Zealand's export earnings. However, primary sector exports were exposed to severe commodity price fluctuations in the reporting period. In addition, we note in Table 1.2 the extraordinary fluctuations of GDP growth in the primary sector in past years. We take this as a consequence of the commodity price fluctuations on export markets.
Does this exposure to commodity price fluctuations have consequences on the overall growth of the economy?
The extraordinary fluctuations in real GDP growth in the primary sector in recent years largely reflect weather conditions, e.g. the summer drought in 2013. Fluctuations in prices for New Zealand's commodity exports can transmit to overall economic growth through the income effect on agricultural producers and manufacturers, e.g. dairy farmers and Fonterra. However, New Zealand's export volumes and overall economic activity tend to be fairly insensitive to commodity price fluctuations, supported by the stabilizing effects of a floating exchange rate.
Does New Zealand pursue policies to reduce this exposure to commodity price fluctuations?
An inflation-targeting monetary policy and floating exchange rate are the key institutions that support macroeconomic stability. A stable fiscal policy that allows the automatic stabilizers to operate in response to such shocks also plays a role in supporting macroeconomic stability.
To reduce this exposure over the longer term, there is a policy objective of increasing the value- added of New Zealand's primary sector exports, e.g. by focusing on different parts of the supply chain or increasing product sophistication that requires specialized knowledge and skills. Reduction of exposure to shocks has also been achieved via diversification of export markets, including through the negotiation of trade agreements..
2. Trade and Investment Regime 2.4 Trade Agreements and Arrangements 2.4.2 Regional and Preferential agreements
Para. 2.29 of the Secretariat's report states that New Zealand is a participant in the Trans-Pacific Partnership (TPP) negotiations involving 12 countries in the Asia Pacific region.
How does New Zealand assess the perspectives and calendar for a conclusion of the TPP negotiations?
New Zealand remains committed to achieving a comprehensive, high quality TPP agreement as soon as possible in the coming months.
Which possible negative impacts does New Zealand foresee for countries who are not members of the TPP negotiations but have FTAs with some of the TPP participants?
New Zealand has not completed a review of all FTAs between existing TPP participants and other WTO members. But New Zealand considers a successful high quality, comprehensive TPP agreement that is open to new members could serve as a platform for wider, regional economic integration and, as a result, generate significant benefits to the Asia-Pacific region more broadly.
Did New Zealand assess the possible trade diversions that could affect third countries?
New Zealand's consideration of TPP has focused on the assessment of benefits and impacts of an agreement on New Zealand. If negotiations can be successfully concluded, this will be further
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3. Trade Policies and Practices by Measure 3.2.6 Contingency measures 3.2.6.1 Anti-dumping and countervailing duties
According to para. 3.64 and Table 3.5, "as of end December 2014 New Zealand maintained definitive anti-dumping measures against China, Greece, Malaysia, South Africa, Spain and Thailand". Some of these measures are older than 10 years.
How do the New Zealand authorities reconcile the objectives of a strong competition policy on the domestic market with the use of antidumping duties which tends precisely to reduce competition in the domestic economy?
Anti-dumping measures are imposed and maintained consistent with New Zealand's rights and obligations under the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994. This includes Article 11 of that Agreement which sets out the rights and obligations of Members with regard to the duration and review of anti-dumping duties.
New Zealand does, however, recognize that anti-dumping duties can have an adverse impact on competition and consumers. Cabinet has consequently recently approved the adoption into New Zealand's anti-dumping and countervailing duties regime of a bounded public interest test. This test will bring greater balance to the anti-dumping and countervailing duties regime by allowing broader public interest elements, such as competition and consumer welfare elements, to be considered before anti-dumping and countervailing duties are imposed on imported goods.
Cabinet also recently directed that officials should consult with stakeholders on introducing an automatic termination period into the anti-dumping and countervailing duties regime, to operate in conjunction with a bounded public interest test. An automatic termination period would ensure that, if duties are imposed, they are terminated after a specified maximum period (e.g. 5 years) and is aimed at preventing duties becoming entrenched for lengthy periods and encouraging domestic industry to adjust to future import competition.
The adoption of a bounded public interest test must be made through an amendment to legislation and its adoption is therefore subject to approval through the usual parliamentary process. The adoption of an automatic termination period is subject to final Cabinet approval after the consultation process has been completed and the process required for any subsequent legislative amendment.
3.4 Measures affecting production and trade 3.4.3 Competition policy
According to para. 3.140 "the Commerce Act may apply to certain conducts outside New Zealand by a person resident or carrying on business in New Zealand that affect a market in New Zealand".
What is the percentage of Commission's cases represent theses outside conducts?
We estimate that 21% of all cases we have considered (including merger clearances and authorizations) since 2010 represent conduct that occurred outside New Zealand by a person resident or carrying on business in New Zealand that affects a market in New Zealand.
Para. 3.146 indicates that "the Commerce (Cartels and Other Matters) Amendment Bill 2011 pursues various objectives, such as introducing criminal sanctions for hard-core cartels".
What are the rationales of these criminal sanctions?
The rationale for introducing criminal sanctions for hard-core cartels are set out in the Regulatory Impact Statement dated 13 October 2011, available at this address: http://www.treasury.govt.nz/publications/informationreleases/ris.
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The Regulatory Impact Statement cites four main benefits of criminal sanctions: improved detection: the threat of criminal sanctions provides an additional incentive for firms to seek leniency and cooperate in any resulting cartel proceedings; improved deterrence: more people may be dissuaded from offending by knowing imprisonment could result because, unlike pecuniary penalties, the deterrent effect of imprisonment is not dependent on an individual's wealth; improved international cooperation: countries that have criminal sanctions for cartel behaviour include many of New Zealand's major trading partners, and without criminalisation, the Commission may be unable to share confidential information or undertake investigations to assist a criminal investigation in another jurisdiction; facilitation of the single economic market project with Australia: criminalisation can provide a major component of improved cooperation between the Commerce Commission and the Australian Competition and Consumer Commission.
Further information about the bill, including relevant Cabinet papers and Parliamentary committee reports, is available at this address: http://www.med.govt.nz/business/competition-policy/cartel- criminalisation.
According to para. 3.150 "New Zealand continues to be involved in bilateral cooperation with overseas competition authorities (Table 3.10)".
Is it foreseen to conclude other cooperation agreements in short or middle term and if yes with which countries?
We expect to conclude a cooperation agreement with the Competition Bureau of Canada in the near future.
Do the current bilateral agreements (respectively the future ones) include the possibility to exchange confidential information?
Our cooperation agreement with the Australian Competition and Consumer Commission (ACCC) contains the possibility of exchange of confidential information. The Commission has the ability impose conditions on the provision of information in response to a request from the ACCC. Conditions can relate to the confidentiality of information, storage, use or access to anything provided and the copying, returning or disposal of copies of anything provided.
3.4.4 State trading, state-owned enterprises
As outlined in para 3.157 the government of New Zealand maintains equity shares of enterprises in different economic sectors.
Could New Zealand elaborate on the ownership of these enterprises?
Almost all of the 49 entities are 100% owned by the national level of government. Three airports are part-owned by the relevant city or district authorities and the national government. The 49 entities are described in the 2013 Annual Portfolio Report, which can be found here: http://www.treasury.govt.nz/commercial/publications/annual-portfolio-report/2013/.
Which governmental levels (national, regional, city/district) are involved in these operations?
As stated above, almost all of the 49 entities are 100% owned by the national level of government. Three airports are part-owned by the relevant city or district authorities and the national government.
Are these crown entities and if so, could New Zealand elaborate on the role of crown entities in New Zealand and how they are organized?
The 49 entities have a variety of different legal forms: companies subject to normal New Zealand companies law State Owned Enterprises subject to the State Owned Enterprises Act
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Crown Entities subject to the Crown Entities Act Crown Research Institutes subject to the Crown Research Institutes Act
However, typically the entities are organized as a company with a board of directors appointed by the Government.
Paragraph 3.176. With regard to the challenge regime of New Zealand the report of the Secretariat indicates that in a second stage, the still dissatisfied suppliers "can consider having recourse to mediation; asking for an independent audit review; requesting investigation by the Auditor-General, by an Ombudsman, or by the State Services Commission; or seeking a resolution in court".
Could the Authorities of New Zealand elaborate on the respective functions and differences of the various legal options by the suppliers?
Recourse to mediation and independent audit review is available by agreement between the procuring entity and the dissatisfied supplier.
Information on the functions of the Auditor General, Ombudsman, and State Services Commission can be found in the "Guide to supplier feedback and complaints" published at: http://www.business.govt.nz/procurement/for-suppliers/working-with-government/feedback-and- complaints. In general terms, the Auditor-General has power to investigate particular complaints and issue recommendations to Parliament. The Ombudsman can investigate complaints and make recommendations to the agency to resolve problems, including for voluntary payments for any loss or inconvenience suffered. If the agency does not accept the recommendation, the Ombudsman may decide to report the matter to Parliament. The State Services Commission may decide to investigate a matter relating to the integrity of the agency.
Are these options mandatory or would it be possible for a supplier to submit a case for resolution directly to court?
Dissatisfied suppliers can submit a case for resolution directly to court: there is no requirement to pursue any other options prior to seeking a remedy from the court.
4. TRADE POLICIES BY SECTOR 4.2 Agriculture, Livestock, and Fisheries 4.2.2 Border measures 4.2.2.2 Export measures
According to Para. 4.20 of the Secretariat's report the kiwifruit industry is the only sector where export management measures remain. Specifically, it is indicated that the Zespri Group Ltd. is given a quasi-monopoly on exports to markets other than Australia.
Could New Zealand indicate the reasons for maintaining a quasi-monopoly for exports of kiwifruit whereas no such monopoly exists for other commodities?
The New Zealand Government maintains a State Trading Enterprise for kiwifruit exports so as to obtain the best commercial return from world markets for producers in New Zealand (See New Zealand's WTO notification G/STR/N/15/NZL of 22 May 2014.)
Does New Zealand envisage to abolish this quasi-monopoly in the near future?
There are no plans to reform the current export management arrangements for the New Zealand Kiwifruit sector.
4.2.4 Dairy industry restructuring
Para. 4.25 of the Secretariats report mentions Fonterra Co-operative Group's still dominant role in the dairy sector. It is furthermore stated that the Dairy Industry Restructuring Amendment Act 2012 introduced a milk price monitoring regime aimed at improving transparency in Fonterra's farm-gate milk price setting.
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Could New Zealand provide further detail on this monitoring mechanism?
The monitoring mechanism was introduced in 2012 to promote the transparency of, and confidence in, Fonterra's milk price setting process and consistency of outcomes with those arising in a contestable market for famers' milk.
The monitoring mechanism works as follows to achieve this objective: 1. Fonterra must make publically available the Milk Price Manual it produces each year which provides the assumptions, inputs and process it will use in the next dairy season to calculate the price it pays farmers for milk at the farm gate (the Base Milk Price);
2. The Commerce Commission annually reviews this manual to ensure it is consistent with the purpose of the monitoring mechanism, which is to promote the setting of a Base Milk Price that incentivises Fonterra to operate efficiently and provides for contestability in the farm gate market.
3. Fonterra must follow the Milk Price Manual in calculating the Base Milk Price. The Commerce Commission also annually reviews Fonterra's calculation of its Base Milk Price.
4. The setting of the Base Milk Price and the Commerce Commission's review of this calculation are based on the concept of a notionally efficient processor. Fonterra must follow two key principles in calculating the Base Milk Price to ensure such price is consistent with that set by a notionally efficient processor:
a. revenue taken into account in calculating the base milk price is determined from prices of a portfolio of commodities at the times that those commodities are contracted to be sold by Fonterra; and b. costs taken into account in calculating the Base Milk Price include the costs of collecting milk, processing milk into commodities (the same commodities taken into account above in determining notional revenue), and the costs of transporting and selling the commodities.
The Commerce Commission publishes a report on each review of the Milk Price Manual and setting of the Base Milk Price. The reports include details of the methodology and analysis and are publically available at: http://www.comcom.govt.nz/regulated-industries/dairy-industry/review-of- fonterra-s-farm-gate-milk-price-and-manual/
Specifically, in which way does the Commerce Commission in charge of monitoring determine whether Fonterra's farm-gate milk price is consistent with a price that would otherwise emerge in a competitive market for farmer's milk?
See previous response.
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INDIA
Questions from Secretariat Report
Page – 7, Paragraph – 12
Background Technical regulations and sanitary and phytosanitary measures (SPS) are intended to reflect WTO provisions. When standards are developed, existing international standards are considered and stakeholder consultation is undertaken. Relatively stringent SPS measures are applied to imports of plant and animal products for biosecurity reasons. In the WTO Committee on TBT, some Members have raised concerns about New Zealand's 2012 proposal to introduce plain packaging of tobacco products, while some other Members have supported it. New Zealand has Mutual Recognition Agreements with some of its main trading partners. The most comprehensive is the Trans-Tasman Mutual Recognition Arrangement with the federal government and state and territory governments of Australia.
Question 1: New Zealand is requested to provide detailed account on how many of its FTA it has provisions for Mutual Recognition Agreements (MRAs).
New Zealand has provisions for MRAs in a number of its Free Trade Agreements. This includes:
• The Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation (ANZTEC), in Relation to Facilitating Trade in Electrical and Electronic Products signed on 15 July 2005.
• Free Trade Agreement Between The Government of New Zealand And The Government of the People's Republic of China, Annex 14: The Agreement between the Government of New Zealand and the Government of the People's Republic of China on Cooperation in the Field of Conformity Assessment in Relation to Electrical and Electronic Equipment and Components.
• The Trans-Tasman Mutual Recognition Arrangement (TTMRA) is a cornerstone of the trading framework established by the ANZCERTA and part of establishing a seamless trans-Tasman business environment through the Single Economic Market agenda. Under the TTMRA, subject to limited exceptions, goods able to be legally sold in one country can be legally sold in the other without having to meet further sales-related requirements. Similarly, people registered to practice an occupation in one country are entitled to register to practice the equivalent occupation in the other country without the need to undergo further testing or examination.
Page – 54, Paragraph – 3.78
Background Part Three of the Fair Trading Act affords the Minister of Consumer Affairs a range of statutory powers to place controls on unsafe consumer goods, i.e. to set mandatory standards for consumer goods, ban unsafe consumer goods (through unsafe goods notices), compel the recall of an unsafe good or issue a product safety policy statement. This last measure was introduced as part of the review of consumer protection legislation in 2013. A product safety policy statement is a statement from the Government in relation to a product safety issue, but it does not in itself carry a legal sanction. It can be used as possible precursor to regulatory intervention. An unsafe goods notice can be introduced without public consultation and it remains in force for 18 months (unless revoked). After the initial 18 months the Minister can make it permanent, following a consultation process.
Question 2: New Zealand is requested to provide clarifications on how it proposes to carry forward with enforcement of Part Three of the Fair Trading Act.
India seeks detailed information on methods and processes and finally enforcement of this Act. It further, also requires a clarification on the position on imported consumer products:
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I. While the product safety policy statement is a statement from the Government in relation to a product safety issue, but it does not in itself carry a legal sanction; II. How does the country proposes to use it as a precursor to regulatory intervention; III. The unsafe goods notification can be introduced without public consultation and it remains in force for 18 months (unless revoked).
Is the Act compatible with the WTO obligations under the TBT Agreements?
Concerning the specific clarifications sought:
We confirm that failure to comply with the terms of a product safety policy statement is not punishable by any legal sanctions;
A product safety policy statement can serve as an indication to industry of the Government's preferred approach to an issue. If industry ignores the statement, the Government may consider implementing its preferred approach by regulation.
We confirm that an unsafe goods notification can be introduced without public consultation and that it remains in force for 18 months (unless revoked).
We also confirm that we consider the Fair Trading Act, including its Part Three, to be compatible with the WTO obligations under the TBT Agreements.
For detailed information on the methods and processes of Part Three of the Act, we kindly suggest you examine section 29-33D of the Act, which you can access here: http://www.legislation.govt.nz/act/public/1986/0121/latest/whole.html#DLM96968.
We also direct you to the following website: http://www.consumeraffairs.govt.nz/for- business/compliance/product-safety.
Page – 55, Paragraph – 3.89
Background The Food Act 2014 updates the Food Act 1981. It reforms provisions on trade in food in order to enhance safety and suitability. It also sets guidelines for risk-based measures to improve public health protection. The Act is scheduled to be fully in force by mid-2016.
Question 3: New Zealand is requested to provide justification for maintaining higher standards fo Cattle Meat in MRL terms compared to CODEX MRL standard. I. New Zealand is requested to provide scientific justification (risk assessment), as mandated by the SPS Agreement, for the application of higher tolerance level on these pesticides (including herbicides and fungicides) which are great importance for India?
MRLs set by New Zealand for food imports ensure compliance with Good Agricultural Practice and consistency with international obligations, while ensuring food safety. The New Zealand (Maximum Residue Limits of Agricultural Compounds) Food Standards 2015 state that food imports can comply with either the Codex MRL or the New Zealand MRL. Where no specific MRL is set, a default MRL of 0.1mg/kg applies.
II. New Zealand is requested to clearly provide answers as to why such stringent MRL levels are required for the presence pesticides and veterinary drugs like: chlortetracycline, dihydrostreptomycin, eprinomectin, fenbendazole, oxfendazole, oxytetracycline, pirlimycin, streptomycin and tetracycline
MRLs set by New Zealand for food imports ensure compliance with Good Agricultural Practice and consistency with international obligations, while ensuring food safety. The New Zealand (Maximum Residue Limits of Agricultural Compounds) Food Standards 2015 state that food imports can comply with either the Codex MRL or the New Zealand MRL. Where no specific MRL is set, a default MRL of 0.1mg/kg applies.
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III. What are Theoretical Maximum Daily Intake (TMDI) and the Acceptable Daily Intakes (ADI) in each of Veterinary Drugs?
Compound ADI (mg/kg bw) TMDI (mg/person – 70kg) Chlortetracycline 0.03 0.062 Dihydrostreptomycin 0.05 0.091 Eprinomectin 0.01 0.013 Fenbendazole 0.007 0.0092 Oxfendazole 0.007 0.0033 Oxytetracycline 0.03 0.044 Pirlimycin 0.008 0.036 Streptomycin 0.05 0.091 Tetracycline No longer available in New Zealand
IV. India would also like to know whether these were notified under the transparency clause of the WTOs (SPS & TBT) agreements;
MRLs proposed by New Zealand are notified to the WTO as required.
Page – 40, Paragraph – 3.9
Background New Zealand's intellectual property regime aims at ensuring a balance between the interests of rights owners and the society as a whole. Several legislative changes occurred during the review period. A new patent Act entered into force in 2013 to allow, inter alia, stricter examination of applications, and exclude "computer software as such" from patentability. The Copyright Act was amended to facilitate enforcement action against infringing sharing file. The Trade Marks Act was amended several times to accommodate international standards. Protection for geographical indications continues to be provided through the Fair Trading Act 1986. The Geographical Indications (Wine and Spirits) Registration Act 2006, which establishes a registration system for wines and spirits geographical indications is yet to be brought into force.
Question 4: According to information provided, New Zealand has yet to bring the Geographical Indications (Wines and Spirits) Registration Act 2006 in to force. In its absence, how is additional protection for wines and spirits provided for under the New Zealand domestic regime?
The government decided in 2015 to move ahead with bringing the Geographical Indications (Wines and Spirits) Registration Act into force. Further review of the Act has determined that it will require some technical amendments before implementation. There is also a need to develop and promulgate regulations covering the registration procedures and fees. Work on drafting these amendments has begun, with the hope that the amendment Bill will be ready for introduction into Parliament in the next few months. This means the most likely completed implementation date will be in 2016.
Page – 98, Paragraph – 3.164
Background The Copyright Act allows for parallel importing of non-infringing copies of a work into. No import permit is required for parallel imports.
Question 5: What is the regime on exhaustion of rights in case of patents and trademarks?
The Patents Act 2013 has no explicit provision regarding exhaustion. In the absence of such a provision, the issue has been left to the courts. In general the approach is that if goods covered by a New Zealand patent were placed on the market in another country by or with the consent of the patent owner, without any restrictions on further sales of the product, the products may be imported into New Zealand without the consent of the patent owner and such imports would not infringe the New Zealand patent. If the patent owner has placed the products on the market in another country, but with the condition that they must not be exported to New Zealand, the
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The Trade Marks Act 2002 provides for international exhaustion of rights where a registered trade mark is used on goods that have been placed on the market overseas by or with the trade mark owner's consent. See s97A of the Trade Marks Act 2002.
Page –67, Paragraph – 3.186
Background A new Patents Act 2013 came into force in September 2014 and replaced the Patents Act 1953. The new Act brings the New Zealand patent law into closer alignment with New Zealand's trading partners. Several changes were made within the scope of patents registration, including stricter examination of applications and subject matter exclusions. It excludes from patentability certain inventions such as: inventions that are contrary to public order or morality, and 'computer software as such', still allowing for patenting of embedded software.
Question 6: What has been the trend in filings related to computer software since the amendment and how does this compare with the same period in the previous year? What has been the status on grants of patents in case of such applications during the same period?
The Patents Act 2013 entered into force on 13 September 2014. The majority of patent applications filed to date under the 2013 Act have not been examined, as the applicants have not requested examination . For those which have been examined, there has been insufficient time for them to progress to acceptance or grant.
The Intellectual Property Office of New Zealand does not keep records regarding the subject matter of individual patent applications. However, anecdotally, there is no indication of a significant change in the filing of applications for technologies which include claims to computer software.
Page –67, Paragraph – 3.186
Background A new Patents Act 2013 came into force in September 2014 and replaced the Patents Act 1953.
Question 7: What is the role of the Maori Advisory Committee in the context of an application based on traditional knowledge of the Maoris? If the committee finds that the invention is traditional knowledge or is strongly related/based on traditional knowledge of the Maoris, what is the impact of such advise? Please indicate the number of patent applications where the Maori advisory committee found that the invention is either completely or partially based on traditional knowledge of the Maori committee. What was the impact of these findings in these cases?
The Patents Maori Advisory Committee (MAC) was established under the Patents Act 2013. The Commissioner of Patents may seek advice from the MAC on whether an invention claimed in a patent application is:
(i) derived from Māori traditional knowledge or from indigenous plants or animals; and if so, (ii) whether the commercial exploitation of that invention is likely to be contrary to Māori values.
Any advice provided to the Commissioner is not binding on the Commissioner. Should the Commissioner wish to act upon any advice from the MAC, then the applicant is informed and is provided with an opportunity to respond to the matters raised by the MAC before the Commissioner makes a final decision on whether to accept or refuse the patent application.
To date no application filed under the Patents Act 2013 has been referred to the Patents Maori Advisory Committee.
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Page: 58, Paragraph 3.118
Background Document: WT/TPR/S/316 Para 3.118: "3.118. The International Growth Fund (IGF) of NZ$30 million aims at supporting export businesses with high growth potential. In addition, the IGF seeks to increase the number and size of New Zealand businesses embedded in the global economy." (emphasis supplied)
Document: G/SCM/N/220/NZL Page 6: "4. Form of assistance Grant funding of up to 50% of costs of an approved activity may be provided up to a maximum of NZ$1m (GST exclusive), over 5 years. 5. To whom and how assistance is provided Businesses (or groups of businesses) that have been identified as having clear and significant high growth potential and that demonstrate potential to deliver indirect economic benefits to New Zealand (e.g. new technology, managerial expertise) may be accepted onto the programme".
Question 8: As the IGF of NZ$30 million aims at supporting export businesses with high growth potential, is the assistance provided in the nature of export subsidy? What are the criteria on the basis of which funding is granted?
No, the IGF is not an export subsidy because it is not contingent on export performance. It is a capability building grant and reimbursed up to 50% upon completion of capability building activities.
Eligibility criteria: • Firms committed to growth, with potential to contribute significantly to the New Zealand economy, and willing to work closely with NZTE; • Operating in a commercial environment, resident in New Zealand, and registered for Goods and Services Tax; • Financially viable and has management team with sound track record • Has proposals and business concepts that are consistent with laws and regulations in New Zealand and overseas; • Is managed to an NZTE customer engagement plan; and • Is committed to retaining the value of the business in New Zealand.
Assessment criteria: • Size and potential benefit to New Zealand; • Evidence of additionality – whether the project would not go ahead without co funding, or would proceed more slowly or on a smaller scale; • Ability of the firm and its management to deliver on the project; • Value added by NZTE and the expected impact of NZTE involvement on project success; and • Degree of risk associated with the co funding.
Question 9: Whether New Zealand will notify the entire programme to the Subsidies Committee in full details?
No. The International Growth Fund was not notified under New Zealand's previous notification as it did not meet the criteria for notification. Specifically, New Zealand does not consider that the Fund is either specific or that there is a benefit as provided for under the SCM Agreement. There have been no changes to the Fund since 2013 that would change New Zealand's assessment of this fact.
Page – 58 Paragraph – 3.3.5
Background: Document WT/TPR/S/316 - "3.116. Since the previous Review, no substantial change has occurred in New Zealand's export promotion framework. New Zealand Trade and Enterprise (NZTE) remains the key agency involved in export promotion. Its activities include strategic advice, facilitating access to networks, research and market intelligence for new export companies and support for enterprises that already export…
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3.120. Through the Business Growth Agenda (BGA), NZTE has the responsibility to extend companies' international reach by focusing assistance on them and mobilising capital to support business growth." (emphasis supplied)"
Document: WT/TPR/S/316: "3.121. Since the previous Review, the New Zealand Export Credit Office (NZECO) continues to provide trade credit insurance and financial guarantee products that complement those available in the private sector for exporters and banks, including against the risk of non-payment arising from defined political or commercial risks (up to 95% cover). 3.122. NZECO is currently located in the Treasury, and its obligations to third parties are guaranteed by the New Zealand Government. The Government's maximum liability under the scheme is NZ$740 million. To be eligible for NZECO's guarantees, an exporter must be either a New Zealand registered company, or a subsidiary of a New Zealand registered company located abroad; and an economic benefit to New Zealand must exist from the transaction..." (emphasis supplied)
Document: B: G/SCM/N/220/NZL: Page 4: "C. NEW ZEALAND EXPORT CREDIT OFFICE PROGRAMME 1. Period covered by the notification FY 2009/10. 2. Policy Objective and/ or purpose The purpose of the New Zealand Export Credit Office (NZECO) is to assist New Zealand businesses access trade finance. NZECO sells Minister of Finance guarantees covering three types of risks: (a) Political / country risks of a buyer's country; (b) Overseas buyer repayment risks; and (c) New Zealand exporter technical performance and financial capability risks. 3. Background and authority Export Credit guarantees are Minister of Finance guarantees according to section 65ZD of the Public Finance Act 1989. The New Zealand Treasury administers this fund. 4. Form of assistance NZECO provides the following forms of guarantees: (a) Export Credit Guarantees: provides cover against the risk of non-payment under an export contract arising from defined political and commercial risks, enabling exporters and their banks to support usual repayment terms from overseas buyers for a period of longer than one year…. Duration This programme has no fixed duration, but is subject to regular review. A review was undertaken in 2009/10. The next review is due in 2014. The short term trade credit insurance is due to be reviewed in 2014."
Document C: Official Website of New Zealand Export Credit Office "The New Zealand Export Credit Office (NZECO) provides financial guarantee products for New Zealand exporters and banks. Our products help exporters manage risk and capitalise on trade opportunities around the globe.
As well as working directly with exporters, we work closely with commercial financiers in New Zealand and offshore to support and improve the competitiveness of New Zealand exporters. NZECO is currently located in the Treasury and obligations to third parties are guaranteed by the New Zealand Government.
NZECO's guarantee products are intended to extend the capacity of facilities in the private sector. The Government's maximum liability under the scheme is NZ$740 million."
Questions 10: NZTE is the key agency involved in export promotion. It provides assistance to companies to support business growth. Could New Zealand elaborate on the kind of assistance provided and to whom? What are the specific assistance initiatives undertaken by NZTE that provide such assistance and what is the eligibility criteria to receive assistance?
NZTE helps companies to identify, plan for and act on their biggest opportunities for international growth. They do this in two ways.
First, by boosting companies' global reach and market knowledge to help them succeed internationally, through their network of offices around the world. Second, by helping businesses build expertise they need to be successful internationally: improving efficiency and operations; sparking innovation; refining strategy; enhancing leadership; accessing capital.
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Eligibility is determined by a company's commitment to building a successful international business and genuine drive to add to New Zealand's prosperity. Refer to NZTE's website for more information: http://www.nzte.govt.nz.
Questions 11: It is clear that the assistance provided by NZECO is directly provided to exporters and exporter companies who are New Zealand registered company or subsidiary thereof. Could New Zealand clarify how this assistance provided by NZECO is not in the nature of export subsidy?
In accordance with its mandate and its international obligations, NZECO applies risk-weighted premiums for all its products, which are at levels to adequately cover NZECO's long-term operating costs and any losses. The WTO's ACSM defines export subsidies, as it relates to export credits, as "The provision by governments (or special institutions controlled by governments) of export credit guarantee or insurance programmes, ... at premium rates which are inadequate to cover the long- term operating costs and losses of the programmes.", and therefore the assistance provided by NZECO is not an export subsidy prohibited under the ACSM.
Questions 12: Has the New Zealand Export Office Credit Programme been reviewed in 2014; if so what is the status of the programme?
A review of the New Zealand Export Office Credit Programme was postponed until 2015. This review is currently underway.
Page: 51 Paragraph: 3.2.6.2
Background: "3.67. The Trade (Safeguard Measures) Act 2014 entered into force in November 2014 and put in place a new safeguards regime for New Zealand and repealed the previous law relating to safeguards contained in the Temporary Safeguard Authorities Act 1987. The Act requires New Zealand to apply safeguard measures following WTO rules…
3.70. The AANZFTA, the New Zealand–Thailand Closer Economic Partnership Agreement, the New Zealand–China FTA, and the New Zealand-Malaysia FTA include a bilateral transitional safeguard mechanism which allows each Party to impose a bilateral transitional safeguard on imports from the other Party during the period tariffs are being phased out for any particular good and for a limited period. Such a transitional safeguard mechanism can be imposed to address situations of serious injury or threats of serious injury to a domestic industry caused by increased imports as a result of tariff reductions under the FTA. In these situations, action can include suspending further tariff reductions or reverting to higher tariffs for a certain period.
3.71. The Closer Economic Partnership between New Zealand and Hong Kong, China and the Economic Cooperation Agreement between New Zealand and Chinese Taipei, both include a provision where, if either Party imposes a WTO safeguards measure, it shall exclude imports from the other party if such imports are not a cause of serious injury or threat thereof. The New Zealand–Thailand Closer Economic Partnership Agreement, the New Zealand–China FTA and the New Zealand–Malaysia FTA provide that a Party applying a global safeguard measure may exclude imports from the other Parties where those imports are not cause of serious injury. Under the Australia-New Zealand Closer Economic Relations Agreement and the New Zealand–Singapore Closer Economic Partnership Agreement, a Party imposing a global safeguard measure must exclude imports originating from another Party from the measure."
Questions 13: Nothing in the Safeguards Agreement or the GATT 1994 appears to permit a Member to exempt imports from certain countries from application of safeguard measure solely on the grounds that such an exemption would "further its international obligations or trade goals". Could New Zealand clarify how such a blanket exemption on a mandatory basis would be consistent with provisions of Article 2.2 of the Safeguards Agreement?
New Zealand considers that exempting certain imports from a country or countries from a safeguard measure is consistent with our obligations under Article 2.2 of the Safeguards Agreement provided the concept known as "parallelism" is applied to the analysis of whether
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- 40 - increased imports have caused serious injury to a domestic industry. The term "international relations or trade goals" allows an exemption to be given to a trading partner with whom we have concluded particular preferential trading arrangements under a free trade agreement.
Page: 58 Paragraph 3.123 and 3.124
Background: "3.123. Traditionally, the NZECO products relate to medium and long-term financing (between one and 14 years). However, in response to the global financial crisis, NZECO's mandate was extended in 2009 to cover short-term trade credit insurance, which covers the risk of a foreign buyer defaulting on their short-term repayments (less than 360 days), due to specific commercial or political events. NZECO is not mandated to compete with the private insurers and can only provide this product for non-marketable risks and/or where the insurers lack the capacity. During the 2013/2014 financial year, NZECO guaranteed NZ$306 million worth of export transactions in support of 36 exporting companies, of which 74% had annual turnovers of less than NZ$50 million and 62% had annual turnovers of less than NZ$25 million.
3.124. According to the authorities, NZECO follows the OECD Arrangement on export credits and pricing, as well as its own Crown mandated criteria and prudential limits."
Questions 14: NZECO's mandate now also covers short-term trade credit insurance which covers the risk of a foreign buyer defaulting on their short-term repayments (less than 360 days), due to specific commercial or political events. Could New Zealand clarify whether this provision of short term trade credit insurance is not in the nature of subsidy and therefore, required to be notified as per Article 25 of ASCM?
In accordance with its mandate and its international obligations, NZECO applies risk-weighted premiums for its short-term trade credit insurance, which are at levels to adequately cover NZECO's long-term operating costs and any losses under this programme. Therefore as there is no benefit, New Zealand is not required to notify under Article 25.
Questions 15: Can New Zealand clarify that the NZECO short term trade credit insurance to support exporting companies is in the nature of export subsidy? How New Zealand can grant export subsidy which is prohibited under ASCM?
In accordance with its mandate and its international obligations, NZECO applies risk-weighted premiums for its short-term trade credit insurance, which are at levels to adequately cover NZECO's long-term operating costs and any losses under this programme. Accordingly, it is not an export subsidy prohibited under the ACSM.
Page: 47 Paragraph 3.2.4
Background: "3.45. In addition to tariffs, an import entry transaction fee (IETF) of NZ$29.26 is payable on every electronic import entry clearance, and on import declaration for goods when the sum of duty and Goods and Services Tax (GST) payable exceeds NZ$60. A MPI biosecurity system entry levy of NZ$17.63 (GST inclusive) is payable on every entry on which an IETF is payable and is collected by Customs at the same time as the IETF. 3.46. An inward cargo transaction fee of NZ$30.66 is payable on every inward cargo report for goods imported by air, and NZ$359.82 for goods imported by sea. 3.47. NZCS also collects: (i) a research levy on imports of heavy steel and welding consumables at rates of NZ$10 per tonne of heavy steel, and NZ$0.05 per kilogram of welding consumables; (ii) a levy on alcohol products on behalf of the Health Promotion Agency (HPA) at various rates (Table 3.4); (iii) a synthetic greenhouse gas (goods) levy on goods containing hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) under the Climate Change Response Act 2002 and the Climate Change (SGG Levies) Regulations 2013 on behalf of the Ministry for the Environment at various rates9; (iv) a biosecurity risk screening levy collected by NZCS on behalf of MPI at rates that can vary between NZ$12.77 and NZ$18.40 (as per the Biosecurity (System Entry Levy) Order 2010). Table 3.4 Summary of the HPA rates on alcohol products….."
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Questions 16: As per paragraph 3.2.4 New Zealand charges other duties and charges at the time of imports which include a levy on alcohol products on behalf of the Health Promotion Agency (HPA) at various rates (Table 3.4). Can New Zealand please clarify whether alcohol products produced in New Zealand are also subject to similar charge of levy and if so what are the rates the like alcohol products produced in New Zealand are taxed?
The Health Promotion Agency (HPA) levy is payable on both New Zealand manufactured and imported alcohol products at the rates specified in Table 3.4 – Summary of the HPA rates on alcohol products.
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CHINESE TAIPEI
PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/316)
Summary
Page 7 (Para 14) New Zealand has a comprehensive legal and institutional framework for competition policy. The Commerce Commission is responsible for enforcing the generic provisions of the Commerce Act, as well as the competition components of industry-specific laws. The Commission is also engaged in international cooperation with overseas competition authorities. While New Zealand's competition regime is considered as generally performing well in international comparisons, some studies have found that the country's small market and remoteness have led to relatively low levels of competition in some services industries (i.e. retail, finance, insurance, real estate and professional services). This may have contributed to low productivity levels and high costs in some of these sectors to the detriment of New Zealand firms and consumers. Proposed amendments to the competition law, including criminal sanctions for hard-core cartels and the application of the Commerce Act to the international freight transport sector, are currently before Parliament.
Question(s): 1. Does New Zealand have any plans or policies to upgrade competition in those services industries which have relatively low levels of competition (i.e. retail, finance, insurance, real estate and professional services)?
New Zealand has no plans that are specific to service industries. The New Zealand government approach is more general; it undertakes regular reviews aimed at ensuring that competition policy settings are appropriately set for all goods and services industries.
2. If so, could New Zealand please elaborate on these plans?
N/A
1. Economic Environment 1.7 Trade Performance
Page 19 (Para 1.32) The Secretariat Report noted that New Zealand's external trade (exports and imports) of goods and services was equivalent to 56.7% of real expenditure GDP in 2013/14 (compared to 65.0% in 2008/09). This reflects a relatively lower trade exposure than one would expect given the economy's small size and degree of openness.
Question(s): 3. Please elaborate the main reasons why New Zealand's external trade (exports and imports) of goods and services in 2013/14 decreased by 8.3% from 2008/09, when the global financial crisis had struck the international economy.
The ratios are calculated using current price (nominal) values for exports, imports, and expenditure on GDP (GDE), not real as stated in paragraph 1.32 of the Secretariat Report.
The reason the current price ratio of external trade (exports plus imports) to GDE fell between 2008/09 and 2013/14 is due to prices for exports and imports falling relative to prices for total GDE.
Between 2008/09 and 2013/14 export prices fell 2.2% and import prices fell 12.4%, while prices for total GDE increased by 10.3%. Over the same period, the volume of exports increased 13.1%, the volume of imports increased 17.8%, and the volume of GDE increased 11.1%.
This means that while the volume of goods and services exported and imported relative to GDE increased, the fall in prices for exports and imports relative to GDE caused the current price external trade to GDE ratio to fall.
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Please note price changes were calculated using implicit price deflators for exports, imports, and GDE.
4. Please indicate if New Zealand's FTAs have really increased New Zealand's trade. If yes, please give examples.
Exports to New Zealand's current FTA trading partners comprise 49% of our total exports of goods and services (YE December 2014). The value of New Zealand's merchandise exports to our FTA partners has risen by a compound annual growth rate (CAGR) of 10.3% over the past six calendar years (i.e. years ended December 2008 to 2014) while the value of goods exports to non-FTA partners has dropped by a CAGR of 2.6% over the same period. Similarly, New Zealand's merchandise imports from FTA partners have grown by a CAGR of 3.9%, whilst imports from non-FTA partners have fallen by 1% over the same six year period. It is, however, important to note that it is difficult to attribute increased trade solely to the implementation of trade agreements. Other factors such as technology diffusion, increased travel and migration, changing characteristics in trading partner markets (e.g. growing middle classes) and globalisation, more broadly, can also be drivers of increased trade.
Page 20 (Para 1.34) The primary sector continues to be the most important contributor to New Zealand's export earnings. According to United Nations Comtrade data, the share of primary products in total merchandise export value rose from 69.7% in 2009 to 75.7% in 2014, due mainly to increases in exports of agricultural products (Chart 1.2 and Table A1.1). Dairy and meat products are the main agricultural exports, making up about 38% of total merchandise exports, and have benefitted from high global commodity prices during part of the review period; wood products have also been quite dynamic. By contrast, the share of manufactures in merchandise export value declined from 25.6% in 2009 to 19.9% in 2014, with drops in the shares of machinery and transport equipment, chemicals and other semi-manufactures.
Question(s): 5. Agricultural goods account for nearly 60% of New Zealand's exports. What measures has New Zealand been adopting in order to protect its agricultural development in the face of the rapid climate change of recent years?
The New Zealand Government is assisting the agricultural sector to adapt to a changing climate by ensuring the sector recognises the need to adapt in time, has an incentive to adapt, and has the ability to adapt.
Need to adapt
The Government funds an extensive climate change research programme. The 'Sustainable Land Management & Climate Change Research Programme' includes 'Impacts of Climate Change and Adaptation' as one of three priority topics. For example, the Programme enabled the publication of the report: 'Impacts of Climate Change on Land-based Sectors and Adaptation Options', which identifies practical adaptation activities that are, or can be, part of day-today business, as well as those that build on the innovative drive of the land-based sectors. A copy of this publication is available online at: http://climatecloud.co.nz/CloudLibrary/2012-33-Impacts-cc-land- based_sectors-adaptation-Stakeholder.pdf.
Farmers also have access to early warning systems including the New Zealand Drought Monitor. The Government works with the existing network of sector organisations in New Zealand to ensure the dissemination of this information to farmers.
Incentive to adapt
The incentive to adapt occurs naturally in the absence of Government policy (due to timely recognition of changing climatic conditions). Government policy does not weaken this natural incentive or create perverse incentives for maladaptation (for example, by providing subsidised insurance mechanisms). New Zealand has a producer support estimate (PSE) of less than one percent, the lowest of any OECD country, which ensures that farmers face the actual cost of changes to the farming environment. New Zealand's 'Primary Sector Recovery Policy' ensures that
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- 44 - government responds appropriately in the event of extreme weather events, while also ensuring that government action does not weaken the incentive for farmers to adapt.
Ability to adapt
New Zealand land managers have extensive experience managing risk including adapting farming systems and agricultural land use to changing market and economic conditions (commodity prices, interest rates, exchange rates, etc.) due to the market based and export orientated nature of New Zealand's agricultural sector. Climate risk (risk of drought, flood, etc.) is a core aspect of normal due diligence for any farm purchase or land conversion, and managing climate variability is a key aspect of successful farm management. The role of the Government is to ensure farmers have access to information on the expected changes to New Zealand's climate (at the local level) and suitable adaptation measures. New Zealand farmers are responsible for adapting their individual farming systems to the extent they judge appropriate.
2. Trade and investment regime 2.1 overview
Page 27 (Para 2.4) In general, New Zealand has an open foreign investment regime. However, by means of screening procedures, restrictions apply in a few areas of "critical interest", i.e. certain sensitive types of land, "significant business assets" other than land, and fishing quotas.
Question(s): 6. To what exactly do the "screening procedures" refer?
The "screening procedures" refer to the requirement under the Overseas Investment Act 2005 and sections 56 to 58 of the Fisheries Act 1996 for investments by overseas persons in the following assets:
Sensitive Land; Significant business assets; and Fishing quota to meet criteria for consent. These criteria for consent are found in section 16 (sensitive land) and section 18 (significant business assets) of the Overseas Investment Act 2005. The criteria for consent for the acquisition of fishing quota are found in section 57G of the Fisheries Act 1996.
2.3 Trade Policy Formulation and Objectives Page 28 (Para 2.10)
When formulating trade policy, the MFAT actively shares information and consults with domestic interest groups including business people, unions, Māori and NGOs. A National Interest Analysis on the impact of any proposed preferential trade agreement is prepared prior to examination by Parliament of such agreement, and serves as a basis for public consultations.
Question(s): 7. Could New Zealand explain how MFAT shares information and how it consults with domestic interest groups, including how these interest groups are selected?
The Ministry of Foreign Affairs and Trade conducts wide-ranging public consultations to raise public awareness and seek stakeholder views. The manner and degree of consultation will depend on the specific matter under consideration, but will usually include government departments, Māori, business groups, non-government organisations, and academics.
MFAT shares information in print, by email and online, as well as meeting with key stakeholders, such as exporters and industry sectors and non-government organisations likely to be interested in or affected by the outcomes of Ministry work. Sometimes MFAT will call for submissions on significant pieces of work, such as FTAs, which will be open to the general public. These submissions can provide significant input into negotiations and provide indications of the degree of stakeholder interest in an initiative and the extent of required consultation.
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2.4 Trade Agreements and Arrangements 2.4.1 WTO
Page 29 (Para 2.17) New Zealand is committed to the multilateral trading system. The authorities are of the view that as a country dependant on international trade, New Zealand benefits from clear and transparent trade rules that are applicable to all Members. At the Bali Ministerial Conference in 2013, New Zealand reiterated that the WTO remains its main focus in its efforts to address the challenges that it faces as a trading nation, and to promote broad-based and inclusive growth. It has actively participated in WTO Trade Facilitation negotiations. However, it has not yet ratified the Agreement.
Question(s): 8. What is the process by which Parliament ratifies an agreement? How long does it normally take?
The process of ratification of an agreement in New Zealand has two stages. Acceding, accepting or approving an agreement follows the same process but does not include the initial step of signature.
The first stage is called Parliamentary Treaty Examination and begins following signature of the agreement. This process involves the presentation of the agreement in question to Parliament, along with information summarising the national interest to New Zealand of becoming party to that particular agreement. A Select Committee (usually the Foreign Affairs, Defence and Trade Committee), made up of Members of Parliament, then considers the treaty and hears public submissions on the agreement and its implications, before the committee tables a report in Parliament. Depending on the content of the report, the Government may choose to respond to the report and debate the issue in the House before it takes any binding treaty action. The Parliamentary Treaty Examination process may last between two and four months.
If implementing the agreement requires making amendments to existing domestic legislation or the introduction of new legislation, such legislation is introduced to Parliament for consideration once the Parliamentary Treaty Examination process above is completed. This process again involves select committee scrutiny and a series of votes in the House. This ensures that New Zealand has the domestic legislative framework to meet the obligations imposed by the agreement. The domestic legislative process may take up to, or over, a year.
Only following completion of the two stages above will the Executive take "binding treaty action", including the authorisation of the depositing of an instrument of ratification, accession, acceptance or approval.
New Zealand is currently working to complete its domestic procedures to enable it to submit its instrument of acceptance of the Protocol. New Zealand expects to deposit Notification of Acceptance of the Protocol in advance of the 10th WTO Ministerial Conference to be held in Nairobi in December this year.
Page 29 (Para 2.39) The agreement contains measures to improve business in various economic areas of mutual interest and is supported by agreements on trade and the environment and trade and labour matters. It liberalizes and facilitates trade in goods, services and investment between New Zealand and Malaysia, and goes beyond the commitments made in the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) signed in February 2009.
Question(s): 9. The report mentions that the liberalization degree of New Zealand-Malaysia FTA is higher than AANZFTA. In which area(s) is this so? (e.g. the timetable for tariff reductions, trade in services, investment, etc.)
The MNZFTA provides for tariff elimination for more of New Zealand's exports to Malaysia faster than under AANZFTA. It eliminates Malaysia's tariffs on 99.5% of New Zealand's current exports within seven years (by 2016) of entry-into-force – five years earlier than provided for under the AANZFTA. Key outcomes for goods include improved access for kiwifruit, meat, wool, dairy, fish,
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- 46 - forestry products, liquid milk and manufactured goods, including a number of steel lines, various paints and varnishes lines and a number of plastic product lines. It provides for improved market access for New Zealand services providers in key areas of commercial interest, including education, environmental, management consulting and veterinary services. In addition to its market access commitments, MNZFTA also includes Most Favoured Nation (MFN) treatment in key services sectors and investment. The MNZFTA establishes robust investment protection provisions that improve on those under the AANZFTA.
New Zealand already provides duty-free access for 72.1% of imports from Malaysia. Under the FTA, this will increase to 90.8% in 2010, 94.6% in 2012, 95% in 2014 and 100% by 2016. New Zealand and Malaysia's agreement to reciprocal MFN for key sectors of commercial interest require New Zealand to extend to Malaysia any better treatment relating to those services New Zealand extends third countries in the future. New Zealand has agreed to extend to Malaysian investors any better treatment it agrees in future investment agreements through the reciprocal MFN provision.
Page 34 (Para 2.48) Under the AANZFTA, 99% of tariff lines on exports from New Zealand will benefit from a progressive elimination of tariffs by 2020, whereas all tariffs on ASEAN exports will be eliminated during the same period. A key feature of AANZFTA's rules of origin is that they allow for cumulation between signatories.
Question(s): 10. Do ASEAN members have different tariff reduction schedules with New Zealand? If all ASEAN members will have eliminated tariffs on 99% of all goods exported from New Zealand by 2020, does that mean ASEAN will have formed a "customs union" with regard to goods from New Zealand by that time?
Each ASEAN member state has its own tariff reduction schedule in AANZFTA.
The reference to ASEAN members having eliminated tariffs on 99% of all goods exported from New Zealand by 2020, is calculated on the proportion of New Zealand's total current exports to ASEAN that will enter tariff free after taking into account each country's individual tariff schedule under AANZFTA. The AANFTA does not envisage the creation of a customs union, since there is no agreement to create a common external tariff. Each member retains its respective MFN tariffs.
3.2.6.1 Anti-Dumping and countervailing measures
Page 50 (Para 3.62) Under the trade agreements between New Zealand and Pacific Forum Island Countries, and Canada, there are a number of consultation requirements to be followed, prior to anti-dumping actions.
Question(s): 11. Would New Zealand please elaborate on the conditions and timing that the consultations take place?
Answer Under Article V of the Agreement on Trade and Economic Cooperation between the Government of New Zealand and the Government of Canada 1982, New Zealand is required to notify Canada in writing, as far in advance as practicable, of the initiation of any investigation into dumping relating to goods imported from Canada and the imposition of duties. New Zealand is required to afford Canada an opportunity to consult on the dumping in question. Duties can be imposed if the consultations have not resulted in a solution satisfactory to New Zealand within 60 days of the date of the written notification of the initiation of the investigation.
Before taking anti-dumping action, Article VI(4) of the South Pacific Regional Trade and Economic Cooperation Agreement 1981, requires New Zealand to notify, and if requested consult with, the Party or Parties from whose territory the goods are exported. If a mutually satisfactory solution of the matter is not reached within a period of 60 days from the commencement of consultations, then New Zealand may, after giving notice to the Party from the territory of which the goods are exported, impose anti-dumping duties on the goods. New Zealand may take provisional action
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- 47 - without prior consultation where it considers that "the circumstances are so critical that delay would cause injury to a domestic industry which would be difficult to repair." If taking provisional action, New Zealand would be obliged to immediately provide written advice to the other Party or Parties concerned and to enter into consultations as soon as possible.
3. TRADE POLICIES AND PRACTICES BY MEASURE 3.2.8 Sanitary and phytosanitary requirements 3.3 Measure Directly Affecting Exports
Page 55 (Para 3.97) An importer can apply for an IHS to be drafted if one does not exist. Applications are assessed and prioritized against specific criteria, including the importance of the product, its strategic nature, the net benefit, as well as the work required for the IHS. Risk analysis is the first stage in the development of IHS. It involves the identification of potential pests and diseases associated with a product, the likelihood of entry and establishment in New Zealand and the potential impacts on the economy, the environment and human health in New Zealand. Proposed IHSs go through a wide public consultation before their adoption. The timeframe for public comment varies depending on the nature of the amendment, the number of interested/affected parties, the urgency of the measures, as well as implementation factors.
Question(s): 12. As it was mentioned, an importer who requests for drafting an import health standard should complete the application form and provide relevant information of the products. For continuing the risk assessment, how would the further information be collected? Could New Zealand please explain that the responsibility of preparing the scientific information belongs to the applicant or the NPPO of the exporting country? And how will the MPI determine the priority among the applications? Besides, how could an importer be informed of the progress of its application for an IHS in a timely manner?
Where additional information is required for the assessment, MPI as New Zealand's NPPO, will request the applicant to provide further information. This will normally mean that further information will be required to be provided by the NPPO of the exporting country either directly or through the applicant. Requests are prioritised by assessing importance (criticality to New Zealand), strategic fit (with New Zealand government goals),net benefit (for New Zealand in the longer term), feasibility (of being able to do the work),barriers (whether they can be surmounted), and the amount of work expected. More information is available on the MPI website: http://mpi.govt.nz/importing/overview/import-health-standards/requesting-a-new-ihs/.
MPI provides updates to importers, usually as the completion of significant milestones of the IHS application and development process are completed.
3.4 Measures Affecting Production and Trade 3.4.3 Competition policy
Page 61 (Para 3.141) There is no compulsory requirement to notify the Commerce Commission of mergers and acquisitions in New Zealand. However, business may seek clearance or authorization from the Commerce Commission if they believe a proposed acquisition may have the effect of substantially lessening competition. The effect of clearance by the Commerce Commission is to offer companies protection from legal action under the Commerce Act.
Question(s): 13. Does New Zealand have authority to initiate ex-officio investigations if a proposed merger or acquisition may have the effect of substantially lessening competition in a market?
Under section 47 of the Commerce Act, the Commission has an express power to look at mergers or acquisitions that would have the effect of substantially lessening competition. If a court is satisfied on the application of the Commission that a person has contravened section 47, the court may order fines of up to $500,000 for persons or $5,000,000 for body corporates or may order divesture of assets or shares.
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Where a court, on application from the Commission, considers that a person intends to engage in conduct that would constitute a breach of section 47, the court may order an injunction restraining a person from engaging in such conduct.
Page 63 (Para 3.153) In 2014, a study by New Zealand's Productivity Commission identified relatively low competition in the services sector as one of the main reasons for the low productivity/high costs in the sector. While factors such as foreign investment screening, professional licensing requirements, and the smallness and remoteness of New Zealand's market were pointed out as significant barriers to international competition in services, New Zealand's competition legislation was also described as offering room for improvement. In that regard, the Commerce (Cartel and Other Matters) Amendment Bill is expected to bring further clarification to the competition framework. The Government recently announced that a review of the Commerce Act in response to the matters raised by the Productivity Commission would be undertaken.
Question(s): 14. Could New Zealand please provide further details about the Commerce Amendment Bill in response to the needs of competition reform in services sector?
One of the principle objectives of the amendment Bill is to introduce criminal sanctions for hard-core cartel behaviour.
Hard-core cartels are formed when rival firms agree to not compete with each other by fixing prices, restricting output, allocating markets or rigging bids. Cartels allow firms to raise their prices above the competitive level without fear of losing customers to rivals. This increases the profits of cartel participants but does not benefit consumers.
Another objective of the amendment Bill is to ensure that firms are not deterred from entering into legitimate, pro-competitive and efficient arrangements with other firms. It does this through a number of new exemptions as well as a clearance mechanism, which enables parties contemplating collaborative conduct to test with the Commerce Commission whether the arrangement would raise concerns.
Information about the bill, including relevant Cabinet papers and Parliamentary committee reports, is available at this address: http://www.med.govt.nz/business/competition-policy/cartel- criminalisation.
3.4.6 Intellectual Property Rights
Page 68 (Para 3.190) Protection for geographical indications is provided through the tort of passing off, the Fair Trading Act 1986, and the Trade Marks Act 2002. The Geographical Indications (Wine and Spirits) Registration Act 2006 establishes a registration system for wine and spirit geographical indications but this Act is not yet in force. According to the authorities, the Government has taken action in order to bring the Act into force in 2016.
Question(s): 15. Is there any reason that the Geographical Indications (Wine and Spirits) Registration Act 2006 has not entered into force almost after a decade?
The government decided in 2015 to move ahead with bringing the Geographical Indications (Wines and Spirits) Registration Act into force. Further review of the Act has determined that it will require some technical amendments before implementation. There is also a need to develop and promulgate regulations covering the registration procedures and fees. Work on drafting these amendments has begun, with the hope that the amendment Bill will be ready for introduction into Parliament in the next few months. This means the most likely completed implementation date will be in 2016.
16. When the Geographical Indications (Wine and Spirits) Registration Act 2006 is enforced, is there any interaction between the Act 2006 and the Trade Marks Act 2002?
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When the GI Act is brought into force, it will give the Commissioner of Trade Marks the power to refuse to register a trade mark that contains either a prior existing geographical indication registered under the GI Act or where there is an application to register a GI that predates the application to register the trade mark. In similar manner, the Registrar of Geographical Indications will have the power to refuse to register a GI where there is either a prior existing registered trade mark or where there is an application to register a trade mark that predates the application to register the geographical indication.
4. Trade Policy By Sector 4.3 Energy 4.3.1 Overview
Page 79 (Para 4.39) The direction of energy policy is set out in the New Zealand Energy Strategy 2011-2021 and the New Zealand Energy Efficiency and Conservation Strategy 2011-2016 (NZEECS), both released in August 2011. The strategy focuses on four objectives: developing greater energy resources, including renewable and non-renewable; ensuring secure and affordable energy; making efficient use of energy; and maintaining an environmentally responsible approach to energy. New Zealand aims to generate 90% of its electricity from renewable energy sources by 2025, and to achieve a 50% reduction in its greenhouse gas emissions (from 1990 levels) by 2050. The NZEECS sets out specific policies and targets in six sectors to achieve the above objectives.31 The Energy Efficiency and Conservation Authority (EECA) is the government body responsible for improving energy efficiency by businesses and homes and fostering greater use of renewable energy.
Question(s): 17. To achieve the goal of renewable energy generation, what main policies are implemented in the renewable energy industries in New Zealand? Are there any incentive measures or subsidy policies for renewable energy industries? If so, please illustrate the content of these policies.
In addition, the National Policy Statement for Renewable Electricity Generation 2011 came into effect on 13 May 2011. It is a planning document issued under the Resource Management Act 1991 by central government that requires local authorities to provide for renewable electricity generation in their policies and plans. The National Policy Statement recognises the need for new and existing renewable electricity generation to support the Government's target of 90 per cent of electricity from renewable sources by 2025.
Page 79 (Para 4.40) New Zealand Emissions Trading Scheme (NZETS), in place since 2008, is part of the overall energy strategy. After a first review in 2011, amendments to the NZETS were passed in 2012 with the purpose of reducing its cost impact on businesses and households, improving its operation and making it more flexible. Some transitional provisions were extended until the next review in 2015.
Question(s): 18. New Zealand Emissions Trading Scheme (NZETS) has been executed for about 7 years; has it increased the cost of energy products, which might affect the benefit of energy supplier in New Zealand?
The ETS is designed to raise the cost of fossil fuels (such as mineral diesel and electricity) thereby incentivising investment in non-emitting fuels and technologies (such as biofuels and renewable electricity generation). Renewable energy producers (such as hydroelectric generation or biodiesel production facilities) benefit from any resulting increase in market prices for those energy commodities.
19. If it has, has it influenced the quantities and prices of energy products from other countries? The ETS applies equally to imported and domestically produced fossil fuels. For example it applies equally to imported coal and coal mined in New Zealand, and to imported liquid fossil fuels and liquid fossil fuels refined in New Zealand.
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4.3.2 Electricity
Page 81 (Para 4.47) The Public Finance (Mixed Ownership Model) Amendment Act 2012 provided for the partial privatization of the three state-owned generators/retailers. Accordingly, the Government sold 49% of its stake in Mighty River Power (May 2013), Meridian Energy (October 2013), and Genesis Energy (April 2014). The electricity sector is subject to the provisions of the Overseas Investment Act 2005.
Question(s): 20. As for Mixed Ownership Model, the Government believes there is significant merit in extending the mixed ownership model to three state-owned energy companies. However, is it likely to delay and deter the switch to increased renewable use?
The ownership of electricity companies is not expected to influence their incentives to invest in renewables. As noted above, the primary policy instrument is the New Zealand ETS, which does not discriminate between firms on the basis of their ownership.
4.3.3 Hydrocarbons
Page 82 (Para 4.53) A competitive tax and royalty regime is in place to attract investment to the petroleum sector. Exploration-related expenditures are deducted for royalty purposes in the year they are incurred. Non-resident offshore rig operators and seismic vessels are exempted from paying tax on their profits. This exemption was introduced as a temporary measure in 2005 but has since been extended twice; it is now due to expire on 31 December 2019.
Question(s): 21. Is the competitive tax and royalty regime also applied to natural gas sector?
Yes
Does the natural gas exploration activity have the tax exemption as well?
Yes
Does the government plan to export LNG in the future?
New Zealand currently has no LNG facilities. Petroleum exploration, production and exporting activities are undertaken by private firms. Any export of natural gas in the future would be a commercial decision for the firms involved in its production.
4.5.2 Financial services 4.5.2.1.2 Regulatory framework
Page 86 (Para 4.78) The RBNZ closely monitors banks compliance with the prudential supervision regime, but does not guarantee banks against failures. Currently, there is no formal deposit guarantee scheme.58 In the event that a registered bank fails, the RBNZ will seek to avoid significant damage to the financial system. It may act as the lender of last resort and also use its crisis management powers, which include giving directions to a registered bank that is in difficulties, and recommending that a bank in financial distress be placed under statutory management.
58 The wholesale bank guarantee facility and the retail guarantee scheme introduced in response to the 2008-09 global financial crisis were terminated on 30 April 2010 and 31 December 2011, respectively.
Question(s): 22. How does the Reserve Bank of New Zealand (RBNZ) safeguard the interests of ordinary depositors in financial institutions without the deposit guarantee scheme?
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The Reserve Bank of New Zealand (RBNZ) supervises banks and other deposit taking institutions for the purpose of promoting the maintenance of a sound and efficient financial system. In particular, it aims to achieve this purpose by reducing the risk of these institutions failing (and in the very rare circumstances where they do fail, resolving the failure in a way that minimises the harm to the financial system). However, this supervision is not explicitly for the purposes of depositor protection, and the RBNZ notes that no regulatory regime can entirely remove the risk of an institution failing.
Notwithstanding this, in practice the RBNZ's regulation and supervision acts to protect depositors because in promoting the maintenance of a sound and efficient financial systems it aims to ensure that, amongst other things:
banks and other deposit taking institutions are well capitalised and subject to effective liquidity requirements; banks and other deposit taking institutions have robust governance and risk management systems and processes; banks provide effective and timely disclosure to depositors and the wider market; and the RBNZ is able to manage the resolution of a distressed or failed bank or other deposit taking institution in a way that minimises the overall level of economic disruption.
4 TRADE POLICIES BY SECTOR 4.5.3.2 Regulatory Regime
Page 91 (Para 4.102) There are no restrictions on foreign investment in private telecommunications firms, other than the provisions of the Overseas Investment Act 2005 (Section 2). However, the Constitution of Chorus provides that no person who is not a New Zealand national shall have more than 49.9% of the total voting shares of Chorus without the prior written approval of the Crown, and at least half of the board of directors must be New Zealand citizens.
Question(s): 23. According to Overseas Investment Act 2005, what are the related regulations for a foreign investment to provide telecommunication service, especially in mode 1 and mode 3?
The Overseas Investment Act 2005 does not regulate the provision of telecommunication services by foreign investors.
4.5.4.3 Maritime transport and ports
Page 96 (Para 4.129) Under the Maritime Transport Act 1994, any other foreign ships are not allowed to carry coastal cargo unless they receive authorization to do so...
Question(s): 24. What is the criterion that New Zealand applies to evaluate the application of cabotage permit?
The basic criterion for an authorisation to carry coastal cargo is that the Minister of Transport is satisfied that none of the following categories of ship is available to carry the cargo ("cargo" includes passengers) a New Zealand ship a foreign ship on demise charter to a New Zealand-based operator a foreign ship passing through New Zealand to carry import and/or export cargo in the normal course of its programmed voyage
Authorisations are rarely required, as the above three categories of ships meet New Zealand's routine coastal shipping needs. Authorisations are required occasionally if a foreign ship needs to be used to cover for a New Zealand ship that is out of service or overseas, a foreign ship is needed to carry a specialized cargo, or a cruise ship is based temporarily in New Zealand during the summer cruise season.
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25. To further understand the shipping policy, could New Zealand also elaborate if any policy or regulation regarding foreign vessel carrier's container repositioning between ports of NZ and other parties, as well as within ports in the New Zealand territories?
No specific policy or regulations exist. The repositioning of containers, full or empty, is covered by the same criterion as above.
Page 96 (Para 4.131) The Commerce (Cartels and Other Matters) Bill currently before Parliament seeks to apply the Commerce Act to international shipping, thereby removing the exemption for price-fixing and capacity-limiting agreements.
Question(s): 26. When is the Commerce Bill estimated to take into force?
The Bill was introduced into Parliament in October 2011 and received its first reading in the House in July 2012. The Parliamentary select committee issued its report on the Bill in May 2013. The Bill is still to receive its second and third readings in the House, and finally the Royal Assent. We are not able to indicate when these remaining steps will take place, as timing will depend on the priority the Bill receives amongst a number of other Government measures.
As currently drafted (section 2 of the Bill), the bulk of the Bill will enter into force the day after it receives Royal Assent. Some provisions, including those relating to the criminalisation of cartels) will not enter into force until two (2) years after the date of Royal Assent.
PART II: REGARDING THE GOVERNMENT REPORT (WT/TPR/G/316)
2. Key Developments in trade Policy 2.1 Current Economic Priorities Page 6 (Para 2.25)
Question(s): 1. In the paragraph 2.25 of the Government Report, New Zealand states its concern about the less integration into upstream global value chains and is working to boost its engagement in GVCs. We would like to learn from New Zealand on the ways to improve this situation.
In order to ensure New Zealand companies are able to maximise the value of their products, and to encourage innovation, we are focusing our efforts on creating the necessary conditions that will facilitate the integration of our exporters into global value chains. To a large extent, this is about getting the right policy environment in place to promote trade and investment, including open borders, effective regulation, competitive markets, robust governance, strong institutions and a well-designed macro framework – all issues that the Government is addressing through its Business Growth Agenda. Two key components of this work that are particularly relevant for GVC integration are:
Helping business internationalise While many of our domestic regulations are already supportive of an open and competitive economy, there is scope to continue to refine aspects of our regulatory system and ensure that the design of new laws and regulations take into account the impact on trade and international connections. This means taking a more strategic approach to how we regulate industry in New Zealand. Agencies across the government are working closely with exporters to identify and prioritise regulatory issues that are hindering our exporters' efforts to internationalise, and work towards removing or minimising their impacts.
Removing barriers at the borders Global value chains are dependent on the ability of goods and services to cross multiple borders as they are transformed into their end product. Tariffs and behind the border barriers serve to impede these value chains, reducing their value to countries such as New Zealand.
Completing current FTA negotiations and raising awareness of the advantages conferred by our existing suite of FTAs and related agreements will provide our exporters with improved access to
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4. Domestic Tariff and Trade Policy 4.1 Agriculture Page 8 (Para 4.5)
Question(s): 2. We appreciates that New Zealand maintains an open and transparent trade policy including the low average applied tariff and low average level of producer support in the agricultural sector. We also recognize the importance of risk assessment prior to the importation of determined risk goods. However, due to the time-consuming process of importation risk assessment, it eventually reduces the effect of low tariff in WTO's efforts to promote agricultural trade. We like to learn from New Zealand on the ways that could possibly improve such situation.
New Zealand's requirement that an IHS exist for a risk good prior to its importation is consistent with the SPS Agreement and places no unreasonable impediment on trade. New Zealand adopts relevant international standards where these standards would achieve New Zealand's appropriate level of protection.
There is no set timeline or average time for the development of IHS. The time period involved in the development of an IHS varies, and can, for example, take between 3 months and 3 years. The timeframe for development of a new IHS is dependent upon, but not limited to, a number of factors including the scope of the IHS, the risk assessment required, the nature of the consultation required including the number of interested & affected parties to be consulted, and implementation factors. A person consulted on a draft IHS who has significant concerns with the science upon which the draft IHS is based may also request an independent review of the draft IHS.
New Zealand already has significant coverage for products of plant origin within currently available IHS. For information about currently available IHS please refer to the MPI website at http://www.mpi.govt.nz/law-and-policy/requirements/import-health-standards/. New Zealand will update IHS to cover new products of plant origin where requested, in accordance with the prioritisation process referred to in paragraph 3.97 of WT/TPR/S/316.
5. MULTILATERAL INITIATIVES 5.4 Trade and Environment, Trade and Labour
Page 13 (Para 5.22) Since its last TPR, New Zealand has engaged actively in trade and environment negotiations at the WTO. New Zealand has and will continue to support ambitious outcomes in these negotiations. In particular, ambitious outcomes on fisheries subsidies and on the elimination of tariffs on a broad range of environmental goods have the potential to deliver concrete economic, environmental and developmental benefits. Beyond the WTO context, New Zealand is also a strong proponent of fossil fuel subsidies reform and the 2012 Asia Pacific Economic Cooperation Forum (APEC) commitment to reduce tariffs on a list of 54 environmental goods to 5% or less by the end of 2015. New Zealand is currently leading the Friends of the Chair on Environmental Goods and Services to implement this APEC commitment.
Question: 3. In order to secure a climate-safe future, the reform of fossil fuel subsidies is effectively enforced in New Zealand. Could New Zealand please elaborate on the content of fossil fuel subsidies reform as well as the effectiveness of this reform?
New Zealand is a leading member of the "Friends of Fossil Fuel Subsidy Reform", a small group of non-G20 countries that support the G20 and APEC Leaders' commitments to phase-out subsidies to fossil-fuels, with maximum transparency and ambition. In alignment with our objective on increasing transparency, New Zealand is currently undergoing an APEC peer review of our fossil fuel support measures, and is encouraging other APEC members to join the process. Peru has
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Another key initiative that New Zealand is promoting, is a Fossil Fuel Subsidy Reform Communique, to be presented at COP21 in December 2015 to support efforts to reach a new global climate agreement. New Zealand, together with the "Friends of Fossil Fuel Subsidy Reform", France and the US, launched the Communique in April at the IMF/World Bank meetings in Washington DC. By supporting the Communiqué, countries and other actors recognise FFSR as an important climate-change mitigation policy with clear economic, trade and social co-benefits.
Regarding the effectiveness of reform, New Zealand recognises the political and social challenges related to subsidy reform and the importance of careful reform design, including communications plans and transitional measures such as well targeted safety net programmes, to mitigate adverse impacts on vulnerable groups. The recent experience of members such as Indonesia and Mexico, who have been taking significant steps to tackle fossil fuel subsidy reform, is instructive.
7. BILATERAL AND REGIONAL TRADE AGREEMENTS
Page 14-15 (Para 7.6) Government agencies continue to work with business to ensure they are fully aware of the opportunities available under these FTA agreements, so that there is the fullest possible utilization of preferences and other benefits conferred by New Zealand's FTAs. This includes provision of user-friendly information tools, ongoing dialogue with exporters to ensure they are taking maximum advantage of the agreements; completing built-in negotiations under existing FTAs to expand the scope of commitments in areas such as services and government procurement; addressing impediments that limit the take up of FTA preferences such as documentation requirements; and maximizing the use of existing FTA provisions to maintain or improve market access and facilitate trade.
Question(s): 4. We have noted from para. 7.6 of the Government Report that the government agencies continue to work with business to ensure "the fully possible utilization of preferences and other benefits conferred by New Zealand's FTAs", including "provision of user-friendly information tools". We would appreciate if New Zealand could elaborate further on the operations of the stated "user friendly information tools".
New Zealand uses a number of FTA related tools to provide information to business on the opportunities created by FTAs and how to take advantage of them. This includes:
• Online tariff finder tools (which enable traders to find preferential tariff rates for their products, as well as rules of origin, documentation and other requirements); • FTA guides (online and in hard copy) that include information on FTA outcomes; • Fact Sheets providing detailed information on rules of origin and processes for claiming tariff preference. Regular programmes of outreach to exporting firms to lift awareness of FTA opportunities. Such outreach includes seminars and workshops on the implementation of FTAs.
Page 17 (Para 7.19) The New Zealand-Korea FTA was signed on 23 March 2015. The FTA is expected to enter into force later in 2015. Tariffs on 48.3% of New Zealand goods exports to Korea will be eliminated on entry into force. Once the FTA is fully implemented in Year 20, 97.9% of New Zealand's current exports will enter Korea quota and duty free.
Question(s): 5. Based on Article XXIV of the General Agreement on Tariffs and Trade, a free-trade area is usually understood to mean a group of two or more customs territories in which duties and other restrictive regulations of commerce are eliminated on "substantially all the trade." However, tariffs on only 48.3% of New Zealand goods exports to Korea will be eliminated on entry into force of New Zealand-Korea Free Trade Agreement. In addition, the phase-out period on Korea side is as long as 20 years. Please elaborate on how the New Zealand-Korea Free Trade Agreement is consistent with the Article XXIV of General Agreement on Tariffs and Trade.
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New Zealand considers the market access outcome to be consistent with the GATT, and comparable to the outcomes achieved under our previous trade agreements. It is also important to note that tariffs will be eliminated on 97.8% of New Zealand's current exports by Year 16, so only 0.1% will be phased out over years 16–20.
7.10 The New Zealand-Gulf Cooperation Council Free Trade Agreement
Page 17 (Para 7.20) The Government Report indicates New Zealand concluded negotiations towards an FTA with the Gulf Cooperation Council in 2009 and is now looking to complete the legal verification process. Report by the Secretariat also noted that New Zealand concluded negotiations on this Agreement while it is not yet in force.
Question(s): 6. The New Zealand-Gulf Cooperation Council Free Trade Agreement was concluded in 2009; however, this Agreement had yet to be entered into force. When does New Zealand expect to finish the legal verification process in order to proceed to the next step of entry into force?
New Zealand is looking to complete the legal verification process as soon as possible, however it is not currently possible to reliably estimate the timeframe for completing this process.
7. Please provide detailed information on the legal process (e.g. gathering of public opinion) that the New Zealand Government has to undertake before FTA's entry into force.
Following the conclusion of negotiation of a Free Trade Agreement (FTA), the text of the agreement is submitted to Cabinet for approval. Signature may only occur once Cabinet grants its approval of the text and authorisation to sign the agreement. Following signature, all FTAs must go through the Parliamentary Treaty Examination process. As part of this process the final text of an FTA is presented to Parliament for examination by a Select Committee (usually the Foreign Affairs, Defence and Trade Select Committee), made up of Members of Parliament. During this time, the public will be invited to make submissions as part of the consultation process. Following consideration of the FTA and all information provided both by submitters and officials, including that contained in the National Interest Analysis prepared by officials on the benefits and costs to New Zealand of entering into the FTA, the Select Committee then tables a report in Parliament. The Select Committee may at this time make recommendations regarding ratification of the agreement as presented and the Government may then choose to respond to the report and debate any issues in the House before it takes any binding treaty action.
After the Parliamentary Treaty Examination process, any legislative changes required in order ensure New Zealand has a domestic legal framework to meet the obligations imposed by the FTA go through normal Parliamentary procedures which include Select Committee scrutiny and a series of votes in Parliament. Only once the legislation has been enacted will the Executive take "binding treaty action", ordinarily ratification, so that the FTA can enter into force for New Zealand.
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MEXICO
PREGUNTAS DE MÉXICO AL INFORME DE LA SECRETARÍA
2.2 Marco general. Punto 2.8 (P. 31) ¿La Corte Ambiental es de naturaleza administrativa o judicial? ¿Dicha Corte es de jurisdicción federal?
3.2.6.1 Medidas antidumping y compensatorias. Punto 3.59 (P.57) ¿Existe la posibilidad de continuar la suspensión de los derechos antidumping por más de los tres años señalados? Y en caso afirmativo, ¿cuáles serían los elementos que se tomarían en cuenta para prorrogar dicha suspensión?
3.2.7 Normas y otras prescripciones técnicas. Punto 3.77 (P.61) ¿Desde la entrada en vigor de las regulaciones de Garantías al Consumidor en 1993 y Ley de Comercio Leal en 1986, cuantas veces han sido revisadas y, en su caso, modificadas?
3.2.7 Normas y otras prescripciones técnicas. Punto 3.78 (P.61) ¿Cuál es el procedimiento y cuáles son las sanciones para los bienes de consumo peligrosos?
4.5.4.3 Transporte marítimo y puertos. Punto 4.133. (P. 114) ¿Cuáles son las convenciones y convenios internacionales de protección marítima y del derecho ambiental marino a las que se refieren?
PREGUNTAS DE MÉXICO AL INFORME DE NUEVA ZELANDIA
2.1 Actuales prioridades económicas. Punto 2.1 (P. 4) ¿Qué políticas públicas se han encaminado para promover el incremento de la participación de la fuerza laboral? ¿Existen otros elementos que hayan favorecido dicho comportamiento?
2.1 Actuales prioridades económicas. Punto 2.22 Ordenación de recursos naturales (P. 7) ¿Cuáles han sido los principales retos en la implementación del Programa de Desarrollo de las Empresas?
5.4 Comercio y medio ambiente, comercio y trabajo. Punto 5.19. (P.15) ¿Cuáles han sido los principales retos en la incorporación del componente ambiental en los RTAs?
5.4 Comercio y medio ambiente, comercio y trabajo. Punto 5.22. (P.15) Ante las actuales circunstancias del estado de las negociaciones de Doha y ante la imperiosa necesidad de lograr su conclusión; ¿Como Nueva Zelandia visualiza unos resultados ambiciosos en material de subsidios a la pesca?
7.1 Acuerdo de Acercamiento Económico entre Australia y Nueva Zelandia. Punto 7.7 (P. 17) ¿Cómo es regulado el flujo de personas en materia de mercado laboral?
7.9 Acuerdo de Libre Comercio entre Nueva Zelandia y Corea. Punto 7.19 (P. 20) ¿Considera que los compromisos asumidos en los capítulos laboral y ambiental (nivel de ambición) son suficientemente elevados para responder a los retos actuales? De ser el caso, ¿cuáles son los retos más grandes en su implementación? En caso contradictorio, ¿consideran una revaluación de dichos compromisos en el futuro?
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QUESTIONS FROM MEXICO IN RESPONSE TO THE SECRETARIAT REPORT
2.2 General Framework. Point 2.8 (p. 31)
1. Is the Environment Court an administrative or judicial entity? Is the Environment Court under federal jurisdiction?
The Environment Court is a judicial entity. It is a specialist Court, and mostly deals with issues arising under the Resource Management Act 1991. Appeals from the Environment Court can be made (on a point of a law only) to the High Court of New Zealand.
New Zealand does not operate under a federal system. The Environment Court is a specialist court and as such, sits outside the pyramid for courts of general jurisdiction. Appeals from the Environment Court can be made (on a point of a law only) to the High Court. Information as to New Zealand's Court structure can be found at the Courts of New Zealand website. http://www.courtsofnz.govt.nz/about/system/structure/overview.html
3.2.6.1 Anti-dumping and countervailing measures. Point 3.59 (p. 57)
2. Is it possible to maintain suspension of anti-dumping duties for longer than the specified three years? If so, which factors would be taken into consideration to extend that suspension?
The suspension was made under a 2014 amendment to the Dumping and Countervailing Duties Act. The suspension applies to both existing duties as well as the imposition of new duties for residential building materials. Unless there is a further legislative amendment, the suspension will end on 31 May 2017. We would note that this is the first time that New Zealand has used primary legislation to suspend anti-dumping duties.
In June 2015, Cabinet agreed to introduce a bounded public interest test into New Zealand's anti- dumping and countervailing duties regime and to the broad parameters and procedural requirements of such a test. The public interest test will allow the government to consider whether an anti-dumping duty or countervailing duty is in the wider public interest. The test will apply to all imported goods subject to anti-dumping or countervailing proceedings, not just building material.
Cabinet has also directed that officials should consult with stakeholders on introducing an automatic termination period into the anti-dumping and countervailing duties regime, to operate in conjunction with a bounded public interest test. An automatic termination period would ensure that, if duties are imposed, they are terminated after a specified maximum period (e.g. 5 years) and is aimed at preventing duties becoming entrenched for lengthy periods and encouraging domestic industry to adjust to future import competition.
The adoption of a bounded public interest test must be made through an amendment to legislation and its adoption is therefore subject to approval through the usual parliamentary process. The adoption of an automatic termination period is subject to final Cabinet approval after the consultation process has been completed and the process required for any subsequent legislative amendment.
3.2.7 Standards and other technical requirements. Point 3.77 (p. 61)
3. How many times have the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 been reviewed since they came into force, and if applicable, how many times have they been amended?
Both the Fair Trading Act 1986 and the Consumer Guarantees Act 1993 are regularly reviewed, and where appropriate amended, to ensure that they are fit for purpose and compatible with New Zealand's international obligations.
The last major review of the both Acts took place in 2012 and led to the Fair Trading Amendment Act 2013 and the Consumer Guarantees Amendment Act 2013.
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Below is a list of all the substantive amendment legislation passed since each Act was adopted:
Fair Trading Act
Fair Trading Amendment Act 1990 Fair Trading Amendment Act 1994 Fair Trading Amendment Act 1997 Fair Trading Amendment Act 2000 Fair Trading Amendment Act 2003 Fair Trading Amendment Act (No 2) 2003 Fair Trading Amendment Act 2006 Fair Trading Amendment Act 2008 Fair Trading (International Co-operation) Amendment Act 2012 Fair Trading (Soliciting on Behalf of Charities) Amendment Act 2012 Fair Trading Amendment Act 2013
Consumer Guarantees Act
Consumer Guarantees Amendment Act 2003 Consumer Guarantees Amendment Act 2013
3.2.7 Standards and other technical requirements. Point 3.78 (p. 61)
4. What is the procedure and what sanctions are used for unsafe consumer goods?
Unsafe goods notices are provided for in section 31 of New Zealand's Fair Trading Act 1986.
Under this section, the Minister of Consumer Affairs has the power to stop the sale of goods by declaring them to be 'unsafe goods'. This action can be taken 'where it appears to the Minister that goods of any description or any class or classes of goods will or may cause injury'. A ban stays in force for 18 months, unless withdrawn earlier by the Minister. At this point it can be imposed indefinitely or for a further specified time.
There are unsafe goods notices for: lead in children's toys; hot water bottles; candles with lead in the wicks and candlewicks containing lead; and, pistol crossbows.
Section 31(5) provides that "no person shall supply, or offer to supply, or advertise to supply, goods in respect of which there is in force a notice declaring the goods to be unsafe goods". Failure to comply with this provision is an offence punishable, under s.40(1), by a fine not exceeding NZ$200,000 in the case of an individual; and by a fine not exceeding NZ$600,000 in the case of a body corporate.
The Commerce Commission is the relevant enforcement body. It investigates complaints about products that have an unsafe goods notice attached to them.
4.5.4.3 Maritime transport and ports. Point 4.133 (p. 114)
5. Which are the international maritime and marine environment protection conventions referred to?
New Zealand is a contracting state to the following Maritime Conventions: IMO Convention 48, SOLAS Convention 74, SOLAS Protocol 78, SOLAS Protocol 88, LOAD LINES Convention 66, LOAD LINES Protocol 88, TONNAGE Convention 69, COLREG Convention 72, CSC Convention 72, STCW Convention 78, SAR Convention 79, IMSO Convention 76, INMARSAT OA 76, FACILITATION Convention 65, MARPOL 73/78 (Annex I/II), MARPOL 73/78 (Annex III), MARPOL 73/78 (Annex V), London Convention 72, London Convention Protocol 96, INTERVENTION Convention 69, INTERVENTION Protocol 73, CLC Protocol 92, FUND Protocol 92, LLMC Convention 76, LLMC Protocol 96, SUA Convention 88, SUA Protocol 88, SALVAGE Convention 89, OPRC Convention 90, BUNKERS CONVENTION 01.
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QUESTIONS FROM MEXICO IN RESPONSE TO THE NEW ZEALAND REPORT
2.1 Current Economic Priorities. Point 2.1 (p. 4)
6. What public policies have been set in place to promote increased labour force participation? Are there other factors that have contributed to this behaviour?
New Zealand has relatively high (and increasing) rates of labour force participation, both overall and for women, supported by a growing economy that provides job opportunities. The New Zealand Government's Business Growth Agenda (BGA) is a suite of actions designed to grow competitive businesses which create sustainable, high-paying jobs, and to ensure all New Zealanders have the skills to participate in the labour force. For example, one of the BGA's priority actions is working with educators and industry to offer better options to assist students to progress from secondary school into vocational training and employment.
To further reduce non-participation, New Zealand has also set a cross-Government target of reducing the number of people on state-funded benefits by 25%, and the future cost of the benefit system associated with these clients by $13 billion, as measured by actuarial valuation by June 2018. Achieving this target requires cross-agency collaboration and the use of the investment approach (via actuarial valuation tools) to identify groups at the highest risk of long-term disengagement from the labour market. Actions to achieve this target focus on increased work obligations for more beneficiaries, more intensive case management and greater services and support to help achieve sustainable employment outcomes, as this is showing to have positive employment outcomes for specific groups of clients, based on the latest actuarial valuation.
In the 2015 Budget the Government invested $25.5 million over four years – this included funding for 10,000 extra places for intensive work-focused case management services, prioritised for people with health conditions and disabilities. It also included $8.6 million in new operational funding for the Out of School Care and Recreational (OSCAR) subsidy, which helps families with the costs of before and after school programmes and school holiday programmes, making it easier for sole parents to re-enter the workforce.
2.1 Current Economic Priorities. Point 2.22 Natural resources (p. 7)
7. What were the main challenges involved in implementing the Business Growth Agenda?
The BGA is a cross-government micro-economic reform policy, and as such requires alignment from agencies and ministries across the spectrum of government, ensuring that government agencies consider, and align themselves with, the BGA's greater policy agenda and purpose when engaging in policymaking and creating regulations presents the most significant challenge.
5.4 Trade and Environment, Trade and Labour. Point 5.19 (p. 15)
8. What were the main challenges involved in incorporating environmental considerations into the Regional Trade Agreements?
The main challenge in NZ's experience is establishing an understanding with our RTA partners that what NZ is seeking is not to undermine the comparative advantage of our trading partners, nor to impose our own values in terms of what we consider are the most important environmental issues of the day, but rather that we wish to reinforce the mutual supportiveness of trade and the environment and use RTAs as a tool for promoting sustainable development. New Zealand's approach to including environment outcomes is non-prescriptive and based on internationally recognised principles. In 2001, New Zealand adopted a policy framework for integrating environment (and labour) objectives into our Free Trade Agreements. The framework results from the Government's belief that economic and trade partnership agreements are not ends in themselves, rather that economic growth and improving the environment go hand in hand, and free trade and environmental protection are complementary rather than competing ways to improve standards of living. In the bilateral and regional trade context, the inclusion of environmental instruments has since been an integral component of our FTA negotiations.
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5.4 Trade and Environment, Trade and Labour. Point 5.22 (p. 15)
9. Considering the current state of Doha Round negotiations and the pressing need to reach a conclusion, how does New Zealand envisage ambitious outcomes on fisheries subsidies?
Given the compelling case for fisheries subsidies reform, we remain committed to securing substantive and effective disciplines on fisheries subsidies. However, we also recognise that the current post Bali discussions on recalibration are focused on finding newer, alternative paths towards convergence amongst the membership and what is achievable. New Zealand is reflecting on what such an outcome with regard to fisheries subsidies, within the broader post-Bali work programme, could look like and is consulting with other Members.
7.1 Australia New Zealand Closer Economic Relationship. Point 7.7 (p. 17)
10. How is labour market flow regulated?
The Trans-Tasman Travel Arrangement (TTTA) essentially allows New Zealanders and Australians to enter, live and work freely in each other's country. The TTTA is not a single binding bilateral treaty, but rather a long history of arrangements and undertakings between New Zealand and Australia, and underpinned by joint political support. Additionally, the Trans-Tasman Mutual Recognition Agreement (TTMRA) allows anyone registered to practise an occupation in one country to practise in the other without further testing or examination (subject to some exceptions). Both countries work together closely to align and monitor the impact of domestic policies which may impact on trans-Tasman labour market flows.
7.9 New Zealand-Korea Free Trade Agreement. Point 7.19 (p. 20)
11. Are the commitments undertaken in the chapters on labour and the environment (ambition level) considered high enough to respond to the current challenges? If so, what are the biggest challenges to their implementation? If not, could there be a future reassessment of those commitments?
The environment and labour chapters are at the high end of ambition in terms of what New Zealand usually seeks from such provisions in its FTAs, and New Zealand considers they will be very useful in addressing trade-related labour and environment issues. The chapters establish mechanisms for co-operation and dialogue on issues that may arise between the parties and in areas of mutual interest. The chapters include key principles, including commitments that neither labour nor environment laws, policies, regulations or practices will be used for trade protectionist purposes (non-discrimination), or weakened to encourage trade or investment (non-derogation).
No significant challenges to implementation are foreseen. But if deemed necessary, these commitments could be reassessed as part of the regular committee processes that are established under the chapters, and/or under the general review provisions of the FTA.
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COLOMBIA
Secretariat Report WT/TPR/S/316
SUMMARY
Paragraph 5 of the Secretariat Report points out that "in 2013/14, reflecting a relatively low trade intensity given the small size of the economy, which might be partly explained by the country's geographical remoteness from world markets. Primary sector-based products continue to dominate merchandise exports, increasing their share to 76%, mainly on account of high international commodity prices; while imports concentrate in manufacture (mainly capital goods) and raw materials."
1. Which strategies has New Zealand established to counterbalance the negative economic impact caused by the great geographic distance which separates it from the rest of the world?
Ameliorating the impact of New Zealand's relative geographic distance is one of the key drivers of New Zealand's trade strategy which, in its very broadest sense, is articulated through the Government's Business Growth Agenda and focused on what New Zealand businesses need to succeed and grow in the global market place. This includes negotiating comprehensive and high quality FTAs and ensuring we effectively implement existing FTAs. By successfully negotiating the removal of barriers to trade, we can create the necessary conditions for companies to internationalise and access offshore markets and link into global value chains.
Paragraph 12 of the Secretariat Report indicates that "Technical regulations and sanitary and phytosanitary measures (SPS) are intended to reflect WTO provisions. When standards are developed, existing international standards are considered and stakeholder consultation is undertaken. Relatively stringent SPS measures are applied to imports of plant and animal products for biosecurity reasons. In the WTO Committee on TBT, some Members have raised concerns about New Zealand's 2012 proposal to introduce plain packaging of tobacco products, while some other Members have supported it."
2. Could the New Zealand Government expand on the concept of "plain packaging" of tobacco products? Is this type of labelling currently used? If not, why not? Is "plain packaging" used for any other products?
Plain (or standardised) packaging of tobacco products means regulating every aspect of the appearance of tobacco products, in order to prevent any form of tobacco advertising or promotion from occurring on tobacco products and tobacco product packaging. The Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill (Bill) is currently draft legislation before the New Zealand Parliament. Before the Bill can become a law in New Zealand, it must also pass two further debates in our Parliament (which are called the second and third readings), and then be signed by our Governor-General. The plain packaging requirements set out in the Bill are specific to tobacco packaging and tobacco products.
Paragraph 18 of the Secretariat Report mentions that "The primary sector plays a key role in New Zealand's economy … The dairy industry has seen further reforms to improve transparency and access to raw milk by market entrants. The exclusive export licences held by the Fonterra Co-operative Group, New Zealand's major dairy exporter, were phased-out at end 2010."
3. Could the New Zealand Government explain what situation led it to introduce further reforms in the dairy sector? What did those reforms involve?
When Fonterra was established in 2001, it collected over 96% of all cow milk produced in New Zealand. Given this dominant market position, it was necessary to regulate Fonterra to ensure contestability in New Zealand's dairy markets. The pro-competition measures of the Dairy Industry Restructuring Act 2001 were established to ensure that Fonterra faces the same, or substantially similar, incentives as if it were operating in a competitive milk market.
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The pro-competition measures introduced in 2001 included:
Fonterra's obligation (with some exceptions) to accept supply from any farmer and allow withdrawal without restrictions or penalties. Shareholding farmers being able to allocate up to 20% of their weekly production to independent dairy processors. At least 33% of all milksolids supplied on contract within 160 km of any point in New Zealand must be held by an independent processor or be contestable in any given season. Fonterra being obligated to provide a set amount of raw milk each season to independent processors.
Viewed collectively, these measures were to enable competition and efficiency in the New Zealand dairy industry.
Since 2001 further amendments have been made to the DIRA including:
In 2012, Fonterra moved to a new capital structure model known as Trading Among Farmers following agreement by Fonterra's farmer shareholders in 2009. In 2011, concerns were raised about the way in which Fonterra set the farm gate milk price, the claim being that it was set artificially high. This suggested that the incentives the legislation placed on Fonterra were not strong enough to ensure efficient farm-gate milk prices. Amendments in 2012 were made to provide greater transparency and confidence in Fonterra's milk price setting process and methodology. In 2001, regulations were also established that identify how much raw milk Fonterra is obligated to provide other processors in any given dairy season. This is designed to facilitate the entry of independent dairy processors into the farm-gate milk market and support competition in the dairy product market. Following a review in 2011, a number of significant amendments to the regulations were made including a three season limit for processors to access this raw milk and increasing the total pool available to such processors to 795 million litres for each season.
Further details about these recent amendments are outlined at paragraph 4.2.4 (Dairy industry restructuring) of WTO's Trade Policy Review report.
2 TRADE AND INVESTMENT REGIME 2.1 Overview
Paragraph 2.2 of the Secretariat Report points out that "The multilateral trading system remains New Zealand's main vehicle for providing more trading opportunities to its exporters, as well as addressing the challenges it faces as a small and remote country. However, New Zealand has increasingly engaged in RTAs to complement its participation in the WTO system. Ten RTAs are in place; of which, four entered into force during the review period (i.e. the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation; the New Zealand-Malaysia Free Trade Agreement; the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA); and the New Zealand- Hong Kong, China Closer Economic Partnership Agreement)."
4. Could the New Zealand Government advise if it had to bring forward any prior procedure with the Government of the People's Republic of China in order to commence negotiations on the Agreement between New Zealand and the Separate Customs Territory of Taiwan on Economic Cooperation?
The negotiation of the Agreement between New Zealand and the Separate Customs Territory of Taiwan on Economic Cooperation was conducted in a manner entirely consistent with New Zealand's existing foreign and trade policies.
5. Did the approval process for the entry into force of the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation involve the exact same procedure as that used for the entry into force of other trade agreements?
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New Zealand's domestic process for ratifying the Agreement was consistent with our standard practice for other trade agreements. For the Agreement to enter into force, both Parties were required to notify the completion of their respective domestic procedures. The New Zealand Commerce and Industry Office in Taipei (NZCIO) in Taipei, through which the Agreement was negotiated and signed, notified the completion of New Zealand's domestic procedures.
2.4 Trade Agreements and Arrangements 2.4.2 Regional trade agreements (RTAs)
Paragraphs 2.23 to 2.25 of the Secretariat Report state that:
2.23. New Zealand sees Regional Trade Agreements (RTAs) as a way to complement its participation in the multilateral trading system under the auspices of the WTO. The Ministry of Foreign Affairs and Trade coordinates RTAs trade negotiations, with negotiators drawn from other ministries and agencies, including the Ministry of Business, Innovation and Employment; the Ministry for Primary Industries; Treasury; New Zealand Customs Service; the Ministry for the Environment and the Ministry for Culture and Heritage.
2.24. New Zealand's approach is to negotiate comprehensive agreements covering a range of trade-related issues, including: trade in goods (market access, rules of origin, customs procedures, trade remedies, sanitary and phytosanitary measures, technical barriers to trade); trade in services (market access, movement of natural persons); investment; intellectual property; government procurement; competition and consumer policy; trade and labour; and trade and environment.
2.25. As highlighted in the previous Review, New Zealand maintains RTAs under the following frameworks: (i) Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) (in force since 1983); (ii) New Zealand-Singapore Closer Economic Partnership (in force since 2001); (iii) New Zealand-Thailand Closer Economic Partnership (in force since 2005); (iv) Trans- Pacific Strategic Economic Partnership (P4 or TransPac).
6. What is the nature of the different agreements in the framework of the drivers of economic integration referred to in Article XXIV of the GATT?
The Regional Trade Agreements referred to in paragraph 2.25 of the Secretariat Report establish free trade areas consistent with Article XXIV of the GATT and Article V of GATS.
7. If one or more of the agreements do not correspond to any of the drivers [of economic integration] referred to in Article XXIV of the GATT, what is the nature of those agreements?
As noted in the response to question 6.
8. If one or more of the agreements have non-binding provisions, what is the objective and scope of those provisions?
All of the Regional Trade Agreements referred to in paragraph 2.25 of the Secretariat Report have entered into force and are therefore binding on New Zealand.
9. In the event that one of the objectives of the agreements is to increase free trade, what is the legal relationship between the binding commitments of the respective agreements, when they are contained in agreements entered into with other States or customs territories with which there is an existing agreement?
New Zealand and Singapore are parties to two agreements that have been cited: the New Zealand-Singapore Closer Economic Partnership (NZSCEP) and the Trans-Pacific Strategic Economic Partnership (P4). (Chile and Brunei are the other parties to P4.) The legal relationship between NZSCEP and P4 is that New Zealand and Singapore's respective rights and obligations to each other under P4 co-exist with the parties' rights and obligations under NZSCEP. In particular, nothing in P4 will derogate from the rights and obligations of New Zealand or Singapore under NZSCEP and, to the greatest extent possible, NZSCEP and P4 will be interpreted consistently.
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3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Overview
Paragraph 3.5 of the Secretariat Report states that "New Zealand maintains several business assistance and export promotion programmes. The main export promotion agency, New Zealand Trade and Enterprise (NZTE), provides, inter alia, strategic advice, research and market intelligence for new exporters, as well as support for already established export companies. Export credit insurance is also available for exporting firms. Incentive schemes are in place mainly to encourage innovation and capacity building."
10. Could the New Zealand Government specify which are the programmes intended to promote innovation and capacity-building as mentioned in this paragraph? Which sectors are those programmes aimed at?
New Zealand has a range of programmes to encourage business innovation and research and development. Callaghan Innovation was established in 2013 to deliver these programmes and to connect businesses to researchers. Callaghan Innovation's activities include awarding business R&D grants (which co-fund between 20% and 40% of qualifying R&D) and funding privately-run incubator and accelerator programmes which work with entrepreneurs and start-ups.
These programmes are aimed at R&D activity and start-ups rather than particular industrial sectors.
3.2.4 Other charges affecting imports 3.2.4.1 Other duties and charges
Paragraph 3.45 of the Secretariat Report points out that "In addition to tariffs, an import entry transaction fee (IETF) of NZ$29.26 is payable on every electronic import entry clearance, and on import declaration for goods when the sum of duty and Goods and Services Tax (GST) payable exceeds NZ$60. A MPI biosecurity system entry levy of NZ$17.63 (GST inclusive) is payable on every entry on which an IETF is payable and is collected by Customs at the same time as the IETF."
11. How is this amount set?
The import entry transaction fee is based on partial cost recovery of the estimated cost of the services specified in regulation 24A of the Customs and Excise Regulations 1996 (see below for text). The Biosecurity (System Entry) Levy is set by the Ministry for Primary Industries and recovers the costs set out in clause 7 of the Biosecurity (System Entry Levy) Order 2010.
24A Import entry transaction fee (1) An import entry transaction fee of $29.26 must be paid by every person who— (a) makes (whether voluntarily or in compliance with the Act) an import entry under section 39(1) (http://www.legislation.govt.nz/act/public/1996/0027/latest/DLM378408.html ?search=ts_act%40bill%40regulation%40deemedreg_customs+and+excise+ _resel_25_a&p=1#DLM378408of the Act): (b) lodges a document under regulation 25(i)(iii) (http://www.legislation.govt.nz/regulation/public/1996/0232/latest/DLM2205 03.html?search=ts_act%40bill%40regulation%40deemedreg_customs+and+ excise+_resel_25_a&p=1#DLM220503) in relation to goods on which the total duty payable is $60 or more: (c) lodges a document required by the chief executive under regulation 26(2) (http://www.legislation.govt.nz/regulation/public/1996/0232/latest/DLM2205 04.html?search=ts_act%40bill%40regulation%40deemedreg_customs+and+ excise+_resel_25_a&p=1#DLM220504) in relation to goods imported on the same craft by a single importer: (d) gives security for goods that the chief executive is satisfied have been temporarily imported in accordance with section 116(1) (http://www.legislation.govt.nz/act/public/1996/0027/latest/DLM378907.html ?search=ts_act%40bill%40regulation%40deemedreg_customs+and+excise+ _resel_25_a&p=1#DLM378907) of the Act.
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(2) The import entry transaction fee is payable to the Customs to assist in meeting costs and expenses incurred by the Customs in undertaking the following functions and duties relating to the importation of goods: (a) processing the information contained in an import entry or document described in subclause (1): (b) identifying and assessing the nature of any risk associated with, or arising from, the goods to which an import entry or document described in subclause (1) relates: (c) inspecting consignments identified under paragraph (b) as giving rise to risk. (3) The import entry transaction fee is payable with the duty payable on the goods in relation to which the import entry or the document described in subclause (1) is made or lodged. (4) Despite subclause (1), an import entry transaction fee is not payable if the import entry, document, or transaction described in subclause (1) relates only to— (a) goods conveyed, removed, or trans-shipped for export; or (b) goods subject to the control of the Customs that are to be transported from one Customs controlled area to another Customs controlled area for future Customs clearance; or (c) goods in relation to which an entry has already been made and the duty paid because an entry was made in respect of those goods when an earlier consignment was found to be short-packed, short-shipped, or short-landed; or (d) goods in relation to which full details are not available in order to make a full or complete entry; or (e) goods that— (i) accompany a passenger on a craft; and (ii) are for the person's own personal, non-commercial use and not for resale; or (f) any recreational craft that has arrived under its own power from a point outside New Zealand and any goods (being goods of a class for use or consumption on board a craft) carried on that craft. (5) An import entry transaction fee is not payable, or if already paid must be refunded, if— (a) the import entry to which it relates is cancelled under section 155A (http://www.legislation.govt.nz/act/public/1996/0027/latest/DLM379227.html ?search=ts_act%40bill%40regulation%40deemedreg_customs+and+excise+ _resel_25_a&p=1#DLM379227) of the Act; or (b) the document described in subclause (1) to which it relates is withdrawn or cancelled with the permission of a Customs officer. (6) The import entry transaction fee is inclusive of goods and services tax. (7) In subclause (4)(f), recreational craft means any yacht or boat that is used primarily for recreational purposes (including use as the owner's residence) and is not offered or used for hire or reward (for example, as a passenger carrier).
12. Is the amount of the duty set with regard to the approximate cost of the services provided?
See previous response.
13. Why does the Goods and Services Tax (GST) only apply to values over NZ$60?
The New Zealand de minimis is $60 of duty owing. Depending upon freight costs, that can roughly equate to a parcel worth $400 where no tariff duty applies. The purpose of the New Zealand de minimis is to avoid the situation where the cost of collecting duty on a consignment would exceed the revenue gained.
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3.3.5 Export promotion and marketing assistance
Paragraph 3.120 of the Secretariat Report indicates that "Through the Business Growth Agenda (BGA), NZTE has the responsibility to extend companies' international reach by focusing assistance on them and mobilising capital to support business growth."
14. Could the New Zealand Government explain what the "Business Growth Agenda" mentioned in this paragraph consists of?
The Business Growth Agenda is an ambitious work programme agreed to by Government, focusing on the six key inputs businesses need to succeed, grow and add job. These work programmes are: export markets, capital markets, innovation, safe and skilled workplaces, natural resources and infrastructure. The Business Growth Agenda aims to build a more productive and competitive economy by building business confidence, and addressing the issues that matter to firms.
15. What is the annual amount of resources allocated to this Agenda in dollar terms and in relation to GDP?
The Business Growth Agenda is a set of micro-economic policy reforms that is aimed at refining and strengthening New Zealand's economic policy settings in order to create a more productive and competitive economy. Therefore, it doesn't have resources allocated to it per se, as it is not a single project or programme, but instead is a package of reforms that aims to guide and direct New Zealand's economic policymaking.
4 TRADE POLICIES BY SECTOR 4.4 Manufacturing
Paragraph 4.60 of the Secretariat Report points out that "There is no overarching official policy specifically targeted at the manufacturing industry. Instead, the New Zealand Government has put in place several programmes to assist businesses in the sector, mainly in the form of financial support, technical advice and R&D funding. The Business Growth Agenda (BGA) outlines Government initiatives to support New Zealand businesses to grow and help create a more productive and competitive economy, while specific programmes are implemented through government agencies. For example, New Zealand Trade and Enterprise (NZTE) has programmes such as "Better By Design" (which assists companies to improve international competitiveness by integrating design principles across their businesses); "Better By Lean" (helps firms to improve performance by eliminating inefficient processes and activities); and "Better By Strategy" (previously called Manufacturing Plus) assists companies to develop business models, action plans and practical tools to enhance business performance."
In relation to the programmes "Better By Design," "Better By Lean," and "Better By Strategy,"
16. Could the Government of New Zealand advise how long it has been developing these programmes? What was the outcome of the reviews undertaken after 2010?
Better By Design - Better by Design started in 2003 – the result of the government's 2001 commitment to a national framework for growth and a recommendation of the 2002 Design Taskforce. Better by Design uses private coach partnership model to deliver design thinking to companies. A 2011 review resulted in the third evolution of Better by Design from a programme delivered by consultants to one delivered by Design Coaches tasked with building a company's long-term, internal design capability.
Better By Strategy - has been in development 2009. Two reviews have taken place (one every 3 years) that have highlighted the following four themes around: Value Proposition – help customers realise this is a cost rather than an investment; Suitability – making sure people know that the programme can be tweaked to be bespoke; Ecosystem – working to use all of NZTE capability as 'one team'; Roles and Responsibilities - making sure everyone who is involved in the customer experience knows when their role starts and finishes.
Better By Lean - The review led to a change of policies and an update of the content (more service and innovation driven). The LEAN implementation rates after the seminar have gone up slightly as a results.
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17. Could the Government of New Zealand explain if these programmes can be applied to companies in the service sector as well as companies in the manufacturing sector? Can companies benefit from more than one programme?
Better By Design - Yes, any business irrespective of industry can join the Better by Design programme. Furthermore Better by Design can work alongside the other programmes mentioned above (Strategy and Lean). All services delivered by NZTE follow the principle of the right service at the right time.
Better By Strategy - the review also revealed that the BBS programme can apply to any sector. Initially the programme (Sustainable Peak Performance) was designed for Manufacturing companies however we realised very quickly that the programme adds equal value to all sectors. All companies at NZTE can benefit from all service offerings, whilst some companies may not have a huge amount of capacity or capability, they can at least benefit with snippets of programmes or introductions to specific principles or frameworks to assist growth.
Better By Lean - The programmes are relevant for service sector as well. Some programmes (like LEAN) have specially catered version of it for Service Industry and or Governance.
Yes, companies can benefit from more than one programme.
18. Could the Government of New Zealand specify which requirements are stipulated by the New Zealand Government in order for a business to benefit from one or more of these programmes?
Better By Design - There are five modules under the Better by Design programme, each with a slightly different entry criteria. All NZTE customers must be export ready and have the ability to scale. Experience Design thinking is open to all organisations in NZ – but subsidised for NZTE customers. Design Thinking Masterclass is open to all organisations in NZ – but subsidised for NZTE customers. CEO Summit – open to any organisation. CEO Study Tour – invite only based off feedback from NZTE customer managers – tend to be F700 customers (customers that NZTE works with on a close partnership basis) and strategic partners of NZTE. Design Integration – open to NZTE customers – but likely to be used by F700 companies.
For the Better by Strategy programme is available to customers we are actively working with (there is a segmentation criteria for exporters to be eligible). Within this portfolio, we identify customers who may be ideal for the programme by stipulating the following requirements for entry; When a customer has plateaued and want / need to change, but don't know where to start; When a customer has new key staff or stakeholders; When a customer faces environmental or competitive challenges that threaten current business; When a customer needs focus - the scattergun approach no longer works; When a customer wants to grow faster than your industry average, but doesn't know how.
Better By Lean - The businesses need to be "endorsed" by a client manager and should partly contribute to the costs. Co-funding ratios can be between 25-75%.
Callaghan uses a segmentation model to be able to see what businesses potentially benefit the most.
4.5 Services 4.5.3 Telecommunications 4.5.3.2 Regulatory regime
Paragraph 4.103 of the Secretariat Report states that "New Zealand does not impose licensing requirements for entry into the telecommunications business market and control over retail prices is minimal. On the other hand, there is a comprehensive regime regulating conditions for access to networks (although the conditions are less intrusive for new technologies like the UFB network) and Chorus and other UFB network providers are prohibited from providing retail services."
19. What type of access restrictions does this paragraph refer to?
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The access regime refers to the rules that require a regulated network provider to allow retail service providers or access seekers to access its network to receive regulated services, at a price and/or under terms determined by the regulator. Services are regulated following an investigation by the Commerce Commission under the Telecommunications Act and acceptance by the Minister of any recommendation by the Commerce Commission to regulate.
Regulated services include Unbundled Copper Local Loop (UCLL) and Unbundled Bitstream Access services, Local and mobile number portability, and interconnection with the fixed public switched telephone networks.
20. Do [these access restrictions] apply to all operators or only to the dominant operator?
Any eligible access seeker can benefit from regulations made under the access regime. Only network providers with substantial market power (Chorus, Spark, Vodafone and 2degrees in New Zealand) are regulated, although all PSTN providers must supply number portability services.
21. It is also mentioned that these conditions are less intrusive for new technologies such as broadband networks. How are these less intrusive conditions applied? Is this benefit available for all operators?
The Commerce Commission does not have the power to recommend the unbundling of point-to- multipoint dark fibre services until 2020, so long as the relevant network owner has provided an open access undertaking to the Government. This applies to Local Fibre Companies participating in the Ultra Fast Broadband initiative (an initiative to roll-out a fibre network to 75% of the population by 2020). All operators had the opportunity to participate in the Ultra Fast Broadband initiative through an open tender process.
The Commission can recommend regulation of layer 2 fibre pricing following a Schedule 3 investigation under the Telecommunications Act, if it considers regulation would be more effectively promote competition in the market.
4.5.5 Tourism
Paragraph 4.140 of the Secretariat Report states that "New Zealand has no tourism-specific legislation; however the industry is supported by a robust institutional framework and important public investment. Total public funding for tourism for fiscal year 2013/2014 was NZ$129 million. The Tourism Policy Team, within the Ministry of Business, Innovation and Employment, is responsible for advising the Government on the appropriate settings to foster productivity, growth and the contribution of tourism to the economy …"
22. Could the New Zealand Government specify in which activities or areas it invests, in order to improve the tourism sector in New Zealand?
The Government's investment in the tourism sector comprises:
• the funding of advice and services to support decision-making by Ministers on government policy matters; • the collection, processing, analysis and dissemination of tourism data; • the marketing of New Zealand as a visitor destination; • the operation of the Tourism Growth Partnership; • the development and maintenance of the New Zealand Cycle Trail.
23. What were the outcomes of those investments?
Reporting on the outcomes from this investment can be found on pages 36 to 39 of the Minister of Business, Innovation and Employment's annual report at http://www.mbie.govt.nz/about- us/publications/annual-report/annual-report-2014.pdf. One indicator illustrates the contribution of tourists to New Zealand's economy increased from $5.7billion in 2013 to $6.3billion in 2014. Reporting on the outcome of the government's investment in the marketing of New Zealand as a tourist destination can be found in the Tourism New Zealand Annual Report at http://www.tourismnewzealand.com/about-us/publications/ beginning on page 14. Evaluations of
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Informe de la Secretaría WT/TPR/S/316
RESUMEN
El párrafo 5 del informe de la Secretaría señala que… "En 2013/2014 el comercio exterior de mercancías y servicios equivalió al 56,7% del PIB, lo que refleja un índice de intensidad comercial relativamente bajo dado el pequeño tamaño de la economía, como resultado, en parte, de la gran distancia geográfica que separa al país de los mercados mundiales. Los productos del sector primario siguen dominando las exportaciones de mercancías; la proporción de estos productos en las exportaciones totales aumentó al 76% debido principalmente a los elevados precios internacionales de los productos básicos. Los principales productos de importación son las manufacturas (principalmente bienes de capital) y las materias primas…"
1. ¿Qué estrategias ha diseñado Nueva Zelandia para contrarrestar el impacto negativo en su economía ocasionado por la gran distancia geográfica que la separa del resto del mundo?
El párrafo 12 del informe de la Secretaría indica que… "La reglamentación técnica y las medidas sanitarias y fitosanitarias (MSF) de Nueva Zelandia reflejan las disposiciones de la OMC. Cuando se elaboran normas, se examinan las normas internacionales existentes y se celebran consultas con las partes interesadas (…) Algunos miembros del Comité de Obstáculos Técnicos al Comercio de la OMC han expresado preocupación por la propuesta formulada por Nueva Zelandia en 2012 en relación con la adopción de un sistema de empaquetado genérico para los productos de tabaco, mientras que otros la han apoyado…"
2. ¿Podría ampliar el gobierno de Nueva Zelandia el concepto de "empaquetado genérico" para los producto de tabaco? ¿Actualmente se aplica esta clase de etiquetado? ¿En caso negativo por qué no? ¿El "empaquetado genérico" se aplica a otros productos?
El párrafo 18 del informe de la Secretaría menciona que… "El sector primario desempeña un papel fundamental en la economía de Nueva Zelandia. (…) Se han introducido nuevas reformas en el sector de los productos lácteos a fin de incrementar la transparencia y garantizar a quienes ingresan al mercado el acceso a leche sin elaborar. Se redujo gradualmente el número de licencias exclusivas de exportación de que era titular Fonterra Co-operative Group, hasta su eliminación total a finales de 2010".
3. ¿Podría el Gobierno de Nueva Zelandia explicar qué situación lo llevó a introducir nuevas reformas en el sector de productos lácteos? ¿En qué consistieron dichas reformas?
2 RÉGIMEN DE COMERCIO E INVERSIÓN
2.1 Reseña
El Párrafo 2.2 del informe de la Secretaría señala que… "El sistema multilateral de comercio sigue siendo el principal medio a disposición de Nueva Zelandia para lograr que sus exportadores tengan mayores posibilidades de comerciar, así como para superar los desafíos que afronta en su calidad de país pequeño y remoto. Sin embargo, Nueva Zelandia ha recurrido con creciente frecuencia a ACR para complementar los beneficios que le reporta su participación en el sistema de la OMC. Nueva Zelandia ha celebrado diez ACR, cuatro de los cuales entraron en vigor durante el período objeto de examen (el Acuerdo de Cooperación Económica entre Nueva Zelandia y el Territorio Aduanero Distinto de Taiwán, Penghu, Kinmen y Matsu; el Acuerdo de Libre Comercio entre Nueva Zelandia y Malasia; el Acuerdo por el que se establece la Zona de Libre Comercio ASEAN-Australia- Nueva Zelandia (AANZFTA) y el Acuerdo para establecer una asociación económica más estrecha entre Nueva Zelandia y Hong Kong, China)."
4. ¿Podría el Gobierno de Nueva Zelandia comentar ¿si su gobierno tuvo que adelantar algún trámite previo con el Gobierno de la República Popular China para iniciar la negociación del Acuerdo de Cooperación Económica con el Territorio Aduanero Distinto de Taiwán?
5. ¿El proceso de aprobación para la entrada en vigencia del Acuerdo de Cooperación Económica entre Nueva Zelandia y el Territorio Aduanero Distinto de Taiwán, Penghu, Kinmen y Matsu, tuvo exactamente el mismo procedimiento que el realizado para la puesta en vigencia de otros acuerdos comerciales?
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2.4 Acuerdos y arreglos comerciales
2.4.2 Acuerdos comerciales regionales (ACR)
Los párrafo 2.23 al 2.25 del informe de la Secretaría señalan que... "Nueva Zelandia ve en los acuerdos comerciales regionales (ACR) un medio de complementar su participación en el sistema multilateral de comercio bajo los auspicios de la OMC. El Ministerio de Asuntos Exteriores y Comercio coordina las negociaciones comerciales relativas a los ACR, en las que participan, en calidad de negociadores, funcionarios de otros ministerios y organismos, como el Ministerio de la Empresa, la Innovación y el Empleo, el Ministerio de Industrias Primarias, el Tesoro, el Servicio de Aduanas de Nueva Zelandia, el Ministerio del Medio Ambiente y el Ministerio de Cultura y Patrimonio.
2.24. El método de Nueva Zelandia consiste en negociar acuerdos amplios que abarquen diversas cuestiones relacionadas con el comercio, en particular, el comercio de mercancías (acceso a los mercados, normas de origen, procedimientos aduaneros, medidas comerciales correctivas, medidas sanitarias y fitosanitarias, obstáculos técnicos al comercio); el comercio de servicios (acceso a los mercados, circulación de personas físicas); la inversión; la propiedad intelectual; la contratación pública; la política en materia de competencia y consumo; el comercio y la mano de obra y el comercio y el medio ambiente.
2.25 del informe de la Secretaría indica que… "Como se indicó en el Examen precedente, Nueva Zelandia mantiene ACR en los siguientes acuerdos marcos: i) el Acuerdo comercial de acercamiento económico entre Australia y Nueva Zelandia (ANZCERTA) (en vigor desde 1983); ii) el Acuerdo sobre el Estrechamiento de la Asociación Económica entre Nueva Zelandia y Singapur (en vigor desde 2001); iii) el Acuerdo sobre el Estrechamiento de la Asociación Económica entre Nueva Zelandia y Tailandia (en vigor desde 2005); iv) el Acuerdo Estratégico Transpacífico de Asociación Económica (P4 o TransPac) (en vigor desde 2005) y v) el Acuerdo de Libre Comercio entre Nueva Zelandia y China (en vigor desde 2008)."
6. ¿Cuál es la naturaleza de los diversos tipos de acuerdo, en el marco de los vehículos de integración económica referidos en el artículo XXIV del GATT?
7. ¿Si alguno o varios de los tipos de acuerdo no corresponde a ninguno de los vehículos del artículo XXIV del GATT, entonces cuál es su naturaleza?
8. ¿Si alguno o varios de los tipos de acuerdo tiene disposiciones que no tengan carácter vinculante, cuál es el objetivo y alcance de esas disposiciones?
9. Tratándose de esos diversos tipos de acuerdo, en el evento en que uno de sus objetivos sea el de aumentar la libertad del comercio, ¿cuál es la relación jurídica entre los mismos compromisos de carácter vinculante de unos y otros, cuando están contenidos en acuerdos suscritos con otros Estados o territorios aduaneros con los que ya se tenía un acuerdo anterior?
3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS
3.1 Panorama general
El Párrafo. 3.5 del informe de la Secretaría indica que… "Nueva Zelandia cuenta con varios programas de ayuda a las empresas y promoción de las exportaciones. El principal organismo de promoción de las exportaciones, denominado Comercio y Empresas de Nueva Zelandia (NZTE), proporciona asesoramiento estratégico y realiza investigaciones y estudios de mercado para los nuevos exportadores, y presta apoyo a las empresas exportadoras ya establecidas. También hay un programa de garantías de crédito a la exportación para las empresas de este sector. Los programas de incentivos están destinados principalmente a promover la innovación y la creación de capacidad."
10. ¿Podría el gobierno de Nueva Zelandia especificar cuáles son los programas destinados a promover la innovación y la creación de capacidad mencionados en este párrafo? ¿A qué sectores están dirigidos dichos programas?
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3.2.4 Otras cargas que afectan a las importaciones
3.2.4.1 Otros derechos y cargas
El párrafo 3.45 del informe de la Secretaría señala que… "Además de los aranceles se cobra un derecho administrativo de importación (IETF) de 29,26 dólares neozelandeses por cada formulario electrónico de declaración de importación de mercancías cuando la suma del derecho de aduana y el impuesto sobre bienes y servicios (GST) es de más de 60 dólares neozelandeses. Se recauda un derecho de 17,63 dólares neozelandeses (incluido el GST) en relación con el sistema de bioseguridad del Ministerio de Industrias Primarias respecto de cada importación sujeta al pago del IETF, que el Servicio de Aduanas cobra simultáneamente con ese impuesto."
11. ¿Cómo se determina este monto?
12. ¿La cuantía del derecho se determina al costo aproximado de los servicios prestados?
13. ¿Porque el impuesto sobre los bienes y servicios es solo para valores mayores a 60 dólares neozelandeses?
3.3.5 Promoción de las exportaciones y asistencia para la comercialización
El párrafo 3.120 del informe de la Secretaría indica que… "A través del Programa de Crecimiento de las Empresas, la Oficina de Comercio y Empresas de Nueva Zelandia está encargada de ayudar a las empresas neozelandesas a ampliar sus actividades a nivel internacional prestándoles asistencia y movilizando capital para promover su crecimiento."
14. ¿Podría el gobierno de Nueva Zelandia explicar en qué consiste el "Programa de Crecimiento de las Empresas" que se menciona en este párrafo?
15. ¿Cuál es el monto anual de los recursos destinados a este Programa en dólares y con respecto al PIB?
4 POLÍTICAS COMERCIALES, POR SECTORES
4.4 Industrias manufactureras
El párrafo 4.60 del informe de la Secretaría señala que… "No existe una política oficial general para el sector manufacturero. En cambio, el Gobierno de Nueva Zelandia ha puesto en ejecución varios programas destinados a ayudar a las empresas del sector. Los programas consisten principalmente en la prestación de ayuda financiera y asesoramiento técnico y la financiación de actividades de investigación y desarrollo. En el Programa de desarrollo de las empresas del Ministerio de Empresa, Innovación y Empleo (MBIE) se describen las iniciativas adoptadas por el Gobierno para ayudar a crecer a las empresas neozelandesas y contribuir a que la economía sea más productiva y competitiva; al mismo tiempo se ejecutan programas específicos a través de organismos públicos. Por ejemplo, el organismo de promoción del comercio y las empresas de Nueva Zelandia (New Zealand Trade and Enterprise) cuenta con programas como "Better By Design", que tiene por objeto ayudar a las empresas a ser más competitivas a nivel internacional mediante la incorporación de principios en materia de diseño en sus distintas actividades; "Better by Lean", que tiene por objeto ayudar a las empresas a obtener mejores resultados mediante la eliminación de procesos y actividades ineficientes; y "Better By Strategy", denominado anteriormente "Manufacturing Plus", mediante el cual se ayuda a las empresas a elaborar modelos económicos, planes de acción e instrumentos prácticos a fin de obtener mejores resultados comerciales".
Con respecto a los programas: Better By Design, Better By Lean, Better By Strategy, podría el Gobierno de Nueva Zelandia:
16. ¿Indicar cuánto tiempo ha venido desarrollando estos programas? ¿Cuál ha sido el resultado de las evaluaciones al mismo, posteriores a 2010?
17. ¿Explicar si a estos programas pueden aplicar, además de aquellas del sector manufacturero, las empresas de servicios? ¿Si pueden ellas aplicar a más de un programa?
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18. ¿Indicar cuáles son los requisitos que exige el gobierno neozelandés para que una empresa pueda beneficiarse de uno o varios de estos programas?
4.5 Servicios
4.5.3 Telecomunicaciones
4.5.3.2 Régimen reglamentario
El párrafo 4.103 del informe de la Secretaría indica que… "Nueva Zelandia no impone prescripciones en materia de licencias para el ingreso en el mercado de las telecomunicaciones, y el control de los precios minoristas es mínimo. En cambio, aplica un régimen amplio de regulación de las condiciones de acceso a las redes (si bien las condiciones son menos intrusivas en el caso de nuevas tecnologías, como la red de banda ancha ultrarrápida), y Chorus y otros proveedores de servicios de red de banda ancha ultrarrápida tienen prohibida la prestación de servicios al por menor."
19. ¿De qué tipo son estas restricciones de acceso?
20. ¿Se aplican para todos los operadores o sólo para el operador dominante?
21. Igualmente se menciona que estas condiciones son menos gravosas para el caso de nuevas tecnologías como por ejemplo para la red de Banda Ancha. ¿Cómo se aplican estas condiciones menos gravosas? ¿El beneficio es para todos los operadores?
4.5.5 Turismo
El párrafo 4.140 del informe de la Secretaría indica que… "Nueva Zelandia no tiene una legislación específica en materia de turismo; sin embargo, el sector cuenta con el respaldo de un sólido marco institucional y con inversiones públicas importantes. El total de fondos públicos destinados al turismo durante el ejercicio 2013/2014 ascendió a 129 millones de dólares neozelandeses. El Equipo encargado de la política de turismo, dependiente del Ministerio de Empresa, Innovación y Empleo, tiene la responsabilidad de asesorar al Gobierno sobre los medios apropiados para promover la productividad y el crecimiento del turismo y su contribución a la economía…"
22. ¿Podría el Gobierno de Nueva Zelandia indicar en qué actividades o rubros hace sus inversiones destinadas al mejoramiento del sector de turismo en ese país?
23. ¿Cuáles han sido los resultados de dichas inversiones?
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THE EUROPEAN UNION
WT/TPR/S/316 – WTO Secretariat's Report
2. TRADE AND INVESTMENT REGIME 2.3 Trade Policy Formulation and Objectives Paragraph 2.10, page 28
Reference is done to the National Interest Analysis.
EU question No 1: Could New Zealand provide further information on the scope and process of preparing a National Interest Analysis and public consultation?
National Interest Analyses (NIAs) must be prepared and presented to the House of Representatives for all multilateral treaties, and bilateral treaties of particular significance, following the conclusion of negotiations. The department with the main policy interest in the treaty is responsible for developing the national interest analysis, in consultation with the legal division of the Ministry of Foreign Affairs and Trade. Before presentation, NIAs must be approved by Cabinet. Every NIA must be reviewed and cleared by the Treaty Officer at the Ministry of Foreign Affairs and Trade before it is submitted to Cabinet for approval.
NIAs address a range of matters, including the reasons for New Zealand becoming party to a treaty, the advantages and disadvantages, the obligations and costs it imposes, the treaty's economic, social, cultural and environmental effects, and the means of implementing the treaty.
NIAs also require a statement setting out the consultations which have been undertaken or are proposed with the community and interested parties in respect of the treaty. The manner and degree of consultation will depend on the specific treaty under consideration, but will usually include government departments, Māori, business groups, non-government organisations, and academics.
The process and requirements in relation to NIAs are prescribed by the New Zealand Standing Orders of the House of Representatives.
Examples of National Interest Analyses can be found here: http://mfat.govt.nz/Treaties-and- International-Law/03-Treaty-making-process/2--National-Interest-Analyses/index.php.
Paragraph 2.13, page 28
The Business Growth Agenda seeks to increase exports from the present 30% to 40% of GDP by 2025.
EU question No 2: What assumptions about growth rates and terms of trade were made in formulating this goal?
The BGA goal of 'increasing exports to 40% of GDP' is a target, not a forecast. As such, it does not have any built in assumptions. Rather, the goal is intended to provide a target that would represent a lift in growth rates from the trajectory that NZ has historically been on, and should be seen as an organizing principle for Government to help inform, and drive, policymaking.
2.4.2 Regional trade agreements (RTAs) Paragraph 2.28, page 32
The Report notes that New Zealand concluded two RTAs, one with the Gulf Cooperation Council (GCC) and another with Korea.
EU question No 3: Concerning the FTA with the GCC, could New Zealand give an indication on when it is expected to enter into force?
New Zealand is looking to complete the legal verification of the Free Trade Agreement with the GCC as soon as possible. Once legal verification is completed, the Free Trade Agreement can be
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2.5 Foreign Investment Regime Paragraphs 2.58 and 2.59, page 35
EU questions No 4 and 5: Could New Zealand provide further information about whether overseas investors seeking consent for their investment in New Zealand need to pay an application fee or cover specific costs of their application? If so how is the fee/cost determined?
Overseas investors seeking consent under the Act are required to pay an application fee at the time the application for consent is submitted. This is a requirement of section 23(1)(f) of the Act. The applicable fees are listed in Schedule 2 of the Overseas Investment Regulations 2005 and in accordance with section 61(1)(e) of the Act, are used to assist in meeting the costs of exercising functions and powers, performing duties and providing services under the Act. Currently the funding principle of 'full cost-recovery from application fees' applies. The fees and fees structure were developed with regard to the objectives (which address efficiency, equity and fiscal issues) in the New Zealand Treasury's Guidelines for Setting Charges in the Public Sector and are consistent with the principles underpinning other public sector fees.
Paragraph 2.60, page 36
The Report states that out of the 755 investment application, 33 lapsed; and out of the 2,196 post-transaction compliance monitoring exercises 17 did not comply with the conditions.
EU question No 6: Could New Zealand provide the reasons why applications could lapse, as opposed to being withdrawn or declined?
Applications would generally be lapsed if, following further information requests made by the OIO, the applicant fails to respond to the OIO's requests. The decision to lapse is not taken lightly, and the applicant is always given ample opportunity to respond.
EU question No 7: Could New Zealand provide further information about what measures can be taken by New Zealand authorities if an investment project does not comply with the conditions?
It is an offence under section 45 of the Overseas Investment Act 2005 to fail to comply with a consent condition. The maximum penalty for a breach of section 45 is a NZ$100,000 fine. The response of the Overseas Investment Office (the regulator that administers the Act) to non-compliance or partial compliance depends on the severity of the breach, the reasons why the breach occurred, and whether the breach can be resolved in due course. Minor breaches that can be quickly resolved may only result in increased monitoring or a written warning. More serious breaches (which are uncommon) may result in court proceedings being filed by the Overseas Investment Office (either by way of prosecution or a civil penalty). The New Zealand High Court can also order the disposal of property if the Court is satisfied that an offence or contravention of the Act has been committed.
3. TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Overview 3.2 Measures Directly Affecting Imports 3.2.1 Registration, customs procedures and requirements Page 40
EU question 8: Would New Zealand consider amending its procedures to allow Excise Tax to be paid upon release of the goods on to the market?
Excise is a tax or duty on the domestic manufacture of specific goods – in New Zealand these are alcohol, transport fuels, and tobacco. When goods subject to excise-equivalent duty are imported into New Zealand, a rate of duty is levied on them that is equivalent to the excise that would apply if these goods had been manufactured domestically. This ensures that excisable goods are treated consistently in the New Zealand market. Products for export are not subject to excise.
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For goods at the border, excise-equivalent duty is payable when the goods are released from Customs control in the same manner as other duties, taxes and levies collected at the border. To delay the payment of excise-equivalent duty until the time the goods are sold would require these goods to remain under Customs control using storage such as 'bonded warehouses'. New Zealand discontinued the use of bonded warehouses nearly 30 years ago with the introduction of GST. A deferred payment period for excise of up to six weeks was however introduced and is available to importers who meet certain criteria. See http://www.customs.govt.nz/news/resources/factsheets/Documents/Fact%20Sheet%2017.pdf.
There is no intention to change current policy (and re-establish a warehousing facility for imported goods subject to excise tax) to allow Excise to be paid when goods are released on to the market.
EU question No 9: Does New Zealand have any intentions to introduce legislation to prevent the import of illegally logged timber (i.e. go beyond voluntary measures with regards to imports)?
New Zealand's existing regime with respect to the importation of timber is considered sufficient to deal with imports of illegally logged timber. No regulation is currently being considered.
Paragraph 3.13, page 40
EU question No 10: Could New Zealand provide further information if it has plans to make its Trade Single Window interoperable with other countries' similar initiatives?
The Trade Single Window (TSW) system has been designed to be interoperable with other similar systems in other jurisdictions. At this stage there is no activity underway to connect TSW with systems in any other jurisdictions, but Customs is open to approaches from authorities interested in exploring this possibility.
Paragraph 3.18, page 41
The Report notes that NZCS does not maintain an Authorised Economic Operator (AEO) system.
EU question No 11: Could New Zealand provide further information on whether/how New Zealand implements WCO SAFE Framework of Standards and whether it sets some criteria to qualify companies benefiting from related facilitation measures?
New Zealand has implemented the standards required for the Customs to Customs Pillar for cargo, inward and outbound. This includes: a. the legislative authority to inspect inward, outbound and transit cargo; b. Customs controls over imports, exports and transit goods; c. The implementation of non-intrusive inspection equipment for inspection purposes; d. The use of a risk management system to identify high profile shipments for inspection, and the use of profiles and targeting to select shipments for intervention; e. Legislative requirement for advance information on shipments, supported by an electronic clearance system for import, export and transit goods. This includes no customs clearance, no load for export cargo, and specific timeframes; f. Information exchange arrangements with other Customs agencies and domestic agencies.
New Zealand has implemented a specific Customs-to Business programme (the Secure Export Scheme) for exports. The programme is voluntary. As set out in the WCO SAFE Framework, companies applying for the scheme must meet pre-determined security criteria. This criteria includes meeting measures for (as outlined in Annex III to the WCO SAFE framework): a. Satisfactory compliance history; b. Site security including site plans, physical security and access controls; c. Personnel security; d. Document security and integrity of documentation; e. Conveyance security, including transport and logistics providers meeting security controls; f. Application of customs controls over goods, including applying a Customs approved seal or security packaging; g. Staff training and awareness; h. Business continuity plans.
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Specific detail on the qualifying criteria can be found at http://www.customs.govt.nz/features/ses/Pages/default.aspx. Companies that join the SES receive benefits through lower fees and lower intervention rates, and benefits accessed through mutual recognition arrangements with other customs agencies.
New Zealand has implemented measures for all imports (based on risk assessment) to expedite cargo release, reduce transit times and storage costs.
New Zealand has implemented Mutual Recognition Arrangements with the United States, Japan and Korea.
New Zealand is implementing the World Customs Organisation Data Model III through implementation of the Trade Single Window. Four of the five major lodgement types have been made available to trade in WCO Data Model 3 message format, with the final message to be implemented in early 2016.
3.2.4 Other charges affecting imports 3.2.4.1 Other duties and charges Paragraph 3.47 and table 3.4, page 47-78
Table 3.4 of the report shows the rates of the HPA level on alcohol. It demonstrates a bewildering array of different rates per unit of liquid applicable in different categories. When they are converted to per litre of pure alcohol (lpa) they show an inverse proportion to alcoholic strength within each category.
EU question No 12: Would New Zealand consider aligning its Health Promotion Agency levy to a single rate per litre of pure alcohol for all categories of alcoholic drink?
New Zealand currently has no plans to change the way the Health Promotion Agency Levy is calculated.
3.2.7 Standards and other technical requirements Paragraph 3.74, page 52
EU question No 13: Could New Zealand provide further information regarding the standards developed by New Zealand only (not jointly with Australia) clarifying what sectors/product groups such standards cover?
Eighty-two percent of New Zealand Standards were developed jointly by the national standards bodies of Australia and New Zealand. The 18 percent of New Zealand Standards developed unilaterally by New Zealand relate to many sectors. However, the following nine sectors/products account for 76 percent of New Zealand Standards developed unilaterally: 1. civil engineering; 2. health; 3. construction products; 4. solid liquid and gas fuels; 5. building – design and construction; 6. territorial authority; 7. transportation; 8. fire protection; 9. water services.
3.2.8 Sanitary and phytosanitary requirements Paragraph 3.97, page 55
EU questions No 14 to 16: Could New Zealand provide further information on Import Health Standards (IHS): is there a set timeline for developing new IHS? What is the average time for developing IHS? Does New Zealand plan to develop IHS for products of plant origin?
There is no set timeline or average time for the development of IHS. The time period involved in the development of an IHS varies, and can, for example, take between 3 months and 3 years. The timeframe for development of a new IHS is dependent upon, but not limited to, a number of
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New Zealand already has significant coverage for products of plant origin within currently available IHS. For information about currently available IHS please refer to the MPI website at http://www.mpi.govt.nz/law-and-policy/requirements/import-health-standards/. New Zealand will update IHS to cover new products of plant origin where requested, in accordance with the prioritisation process referred to in paragraph 3.97 of WT/TPR/S/316.
Paragraph 3.151, page 62 Discussions about cooperation on competition policy arose between the parties after conclusion of the ASEAN-Australia-New Zealand FTA (AANZFTA).
EU question No 17: Has any cooperation on competition policy taken place in the AANZFTA framework? If so, what and how?
In August 2013, ASEAN, Australia and New Zealand Trade and Economic Ministers agreed to establish a Competition Committee under AANZFTA. The Competition Committee met for its first meeting in November 2013 and has since met two more times.
As well as a number of specific cooperation activities managed through the AANZFTA Economic Cooperation Work Program, support was also provided for the annual ASEAN Competition Conference (this year was the 5th Conference: http:/acc5.info/).
At a national level, programmes to build capability in investigation skills for officials in Viet Nam and the Philippines were held in December 2013 and February 2014, respectively. Officials from Malaysia's Competition Commission and Viet Nam's Competition Agency also received in-country training and mentoring from seconded Australian Competition and Consumer Commission staff during 2013.
During 2013-14, AANZFTA Parties worked to design a new Competition Law Implementation Program (CLIP) that will boost skills transfer and institutional capacity within the region's emerging competition authorities. With a focus on individual country needs and regional economic integration objectives, CLIP activities will build on existing cooperation under AANZFTA through phased and practically-focused technical assistance.
3.4.5 Government procurement 3.4.5.1 Policy and regulatory framework Paragraph 3.159, page 64
The new procurement rules apply to government agencies and specific crown entities.
EU question No 18: Could you specify which procurement or sourcing rules apply to procurement by sub-central procuring entities which are not "government agencies" or crown entities?
In implementing the provisions of the GPA and prior to deposit of its Instrument of Accession, New Zealand is updating its government procurement regulatory framework so that all entities included in New Zealand's final offer (including those that are not government departments or crown entities) are required to comply with GPA commitments.
3.4.5.2 Procedures Paragraph 3.176, page 66
Aggrieved suppliers can take complaints about procurement procedures to MBIE. During the review period 19 complaints were received by MBIE and two resulted in modification of procurement processes or outcomes.
EU question No 19: What was the nature of these complaints and what was the nature of the resultant modifications to procurement processes or outcomes?
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The complaints related to the procurement procedures used by the procuring entity. In two instances, the investigation by MBIE resulted in the procurement being re-tendered with proper procedures followed.
3.4.6 Intellectual property rights Paragraph 3.187, page 67
EU question No 20: Could New Zealand provide some information regarding the actual results of the implementation of its enforcement system against copyright infringements through file sharing?
New Zealand's three notice regime permits rights owners to: • Request that an internet protocol address provider (IPAP) sends up to three infringement notices to an internet account holder who is alleged to have infringed copyright via a file sharing network; • Take a claim of up to $15,000 to the Copyright Tribunal after the notice process is complete.
The number of infringement cases brought to the Copyright Tribunal since it entered into force is 21 (as of 8 June 2015). Awards made against infringers range from between NZ$276 to NZ$914. The first case was decided in 2013. Decisions are publicly available here: http://www.nzlii.org/nz/cases/NZCopyT/.
Paragraph 3.190, page 68
The Report notes that the Government has taken action in order to bring the geographical Indications (Wine and Spirits) Registration Act 2006 into force in 2016.
EU question No 21: Could New Zealand provide further information of the expected timeframe and process for this?
Further review of the Act has determined that it will require some technical amendments before implementation. There is also a need to develop and promulgate regulations covering the registration procedures and fees. Work on drafting these amendments has begun, with the hope that the amendment Bill will be ready for introduction into Parliament in the next few months. This means the most likely completed implementation date will be in 2016.
Paragraph 3.191, page 70
EU question No 22: Could New Zealand clarify whether its copyright system provides for any differentiation in terms of type of product – digital/analogic – in respect of parallel importing of non-infringing copies of a work into New Zealand?
NZ's importation right only applies to infringing copies. Section 12 of the Copyright Act 1994 provides that copy of a work will not infringe copyright if it was made overseas with the consent of the rights owner. No distinction is made in the Copyright Act between digital and physical copies.
Paragraph 3.193, page 68
EU question No 23: Could New Zealand inform Members whether they intend to join the "Hague agreement concerning the international registration of industrial designs" in order to enhance protection for designs?'
New Zealand has no plans to join the Hague Agreement at this stage.
EU question No 24: Could New Zealand provide information on the status quo of trade secrets protection?
New Zealand protects against the unauthorised disclosure of trade secrets both under civil law, through the common law tort of breach of confidence, and under criminal law, through Section 230 of the Crimes Act 1961. The Crimes Act provides for up to 5 years imprisonment for a person who dishonestly obtains a trade secret with intent to obtain pecuniary advantage or cause loss to any other person.
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4. TRADE POLICIES BY SECTOR 4.2 Agriculture, Forestry, and Fisheries 4.2.2.2 Export measures Paragraphs 4.19-4.20, page 75
EU questions No 25 to 27: What is the development in recent years of Fonterra's share in the allocation of export licences for dairy TRQs benefiting New Zealand? How many New Zealand companies (other than Fonterra) are exporting or have exported under these quotas and what is their share? Could New Zealand provide this information for all WTO members from which New Zealand benefits from a TRQ, including the EU, Canada, Japan, the US and the Dominican Republic?
Export licences are required for exporting certain dairy products as a result of quota programmes established by the United States, the European Union, Japan, and the Dominican Republic (the Dairy Industry Restructuring Act 2001 Schedule 5A lists these designated markets). Export licences are allocated by the Ministry for Primary Industries based on an applicant's share of total milksolids collected from dairy farms in New Zealand.
Following an interim period which expired in 2010 and now licences to export to designated markets are allocated to applicants in proportion to their share of the total milksolids collected. To be eligible as an applicant a company must collect at least 0.1 percent of total milksolids collected from dairy farms in New Zealand. Applicants only receive an export licence for a particular market if their share in that market equates to 20,000 kilograms or more for the year.
Export licences are reallocated each year. In recent years Fonterra's share in the allocation of export licences has decreased as new companies enter the market. Five New Zealand companies (other than Fonterra) were allocated export licences for 2015.
Other than Fonterra, four additional companies export butter and cheese to the European Union; cheese to the United States and prepared edible fat to Japan, while five additional companies export milk powder to the Dominican Republic under the respective quotas.
The volume of product exported under quota by each company to each designated market is commercially sensitive.
EU question No 28 to 30: What proportion of exports in the 11 designated markets (TRQs for dairy products in EC, Canada, Japan etc.) are not carried out by Fonterra? In other words, how did the change in the DIRA regulation allow access to other dairy companies to these TRQs? Did the DIRA regulation have any effect in changing the old practice in which Fonterra had exclusive rights to benefit from these TRQs?
See previous response.
The Dairy Industry Restructuring Act provides for other dairy companies to access dairy export licences in proportion to the total amount of milksolids they collect in New Zealand in each year.
According to the report, Kiwifruit New Zealand (KNZ) has given the Zespri Group Ltd. an automatic right to export kiwifruit to all markets except Australia. All other traders wishing to export kiwifruit to markets other than Australia must get prior approval from KNZ in order to export the fruit. This gives Zespri a quasi-monopoly on exports to markets other than Australia. Indeed, Zespri accounted for more than 97% of total exports of kiwifruit each year.
EU questions 31 and 32: Could New Zealand explain what the purpose of this measure is, clarifying in particular why Zespri can benefit of an automatic right to export kiwifruit to all other markets than Australia, while all other traders need to get a prior approval? Could New Zealand clarify whether there has been any denial of a prior authorisation. If so, on which grounds?
The New Zealand Government maintains a State Trading Enterprise for kiwifruit exports so as to obtain the best commercial return from world markets for producers in New Zealand (See New Zealand's WTO notification G/STR/N/15/NZL of 22 May 2014.) Zespri Group Limited receives
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- 81 - no distorting subsidies, tax advantages, special financing, preferential access to foreign exchange or any other support from the New Zealand government.
Over the last five seasons Kiwifruit New Zealand has received 149 applications for collaborative marketing arrangements. 138 applications have been approved, 11 applications have been declined.
Applications were declined because they could not demonstrate that they met the criterion for approval – contributing to an increase in the overall wealth of New Zealand kiwifruit suppliers through a collaborative marketing arrangement with Zespri Group Limited.
4.2.4 Dairy Industry Restructuring Paragraph 4.26, page 77
EU question No 33: How can New Zealand demonstrate that the Dairy Industry Restructuring Act, as reviewed in 2011, has undergone the appropriate reforms and in particular, has adequately addressed the monopoly situation of Fonterra? Please provide substantiating facts and data.
When Fonterra was established in 2001, it collected over 96% of all cow milk produced in New Zealand. Given this dominant market position it was necessary to regulate Fonterra to ensure contestability in New Zealand's dairy markets. The Dairy Industry Restructuring Act includes pro-competition measures to this end.
The pro-competition measures include: • Fonterra has an obligation (with some exceptions) to accept supply from any farmer and allow withdrawal without restrictions or penalties. • Shareholding farmers are able to allocate up to 20% of their weekly production to independent dairy processors. • Fonterra cannot discriminate between suppliers in the same circumstances. • At least 33% of all milksolids supplied on contract within 160km of any point in New Zealand must be held by an independent processor or be contestable through yearly expiry; • If a farmer withdraws from Fonterra, Fonterra must sell the milk vat on the farm to that farmer or an independent processor at market rate. • A milk price monitoring regime with the Commerce Commission as the independent regulator. • Fonterra must sell up to 50 million litres of raw milk per year to independent processors (up to a maximum total of 795 million litres per season). Independent processors may purchase this raw milk for up to three years.
Viewed collectively, these measures enable competition and efficiency in the New Zealand dairy industry. Several privately held companies have been established since the Dairy Industry Restructuring Act was passed in 2001, including Open Country Dairy, Synlait, Miraka, and Oceania Dairy.
On 2 June 2015, the Minister for Primary Industries, in consultation with the Minister of Commerce and Consumer Affairs, officially requested a report from the Commerce Commission on the state of competition in domestic dairy markets. That report will be finalized in early February 2016.
EU questions No 34 and 35: To what extent are dairy processors other than Fonterra expected to be allocated more dairy access rights in the next five years? How has their share developed over the last 4 years and how is their share of access rights expected to grow in the coming 5 years?
Independent processors can contract freely with dairy farmers or other processors to purchase raw milk. In addition, independent processors have the right to purchase up to 50 million litres of raw milk per year from Fonterra. The raw milk can be purchased at an agreed price or the fixed quarterly price determined using the methodology in the Dairy Industry Restructuring (Raw Milk) Regulations.
Fonterra must provide this raw milk up to a maximum total of 795 million litres per season across all independent processors. This is an increase from the maximum total volume of 600 million litres per year that was available prior to the season beginning 1 June 2013.
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Although the maximum total volume has increased, since 1 June 2013, the right to purchase raw milk is limited to three years for each independent processor that itself collects over 30 million litres of raw milk from farms (previously there was no time limit).
The Minister for Primary Industries must review the volumes of raw milk required to be sold under the regulations at an interval of not more than three years. This review is likely to occur in 2016.
EU question No 36: If the thresholds set by the Amendment DIRA Act 2011 are not met by June 2015, the Minister for Primary Industries must, in consultation with the Minister of Commerce, request a report on the state of competition in the dairy industry, which may result in a review of the DIRA. Can New Zealand indicate whether the thresholds will be met or not? If the thresholds are not met what action may be taken?
On 2 June 2015, the Minister for Primary Industries, in consultation with the Minister of Commerce and Consumer Affairs, officially requested a report from the Commerce Commission on the state of competition in domestic dairy markets. The Minister for Primary Industries must respond to the report within 90 days of receiving it. In responding to the report, the Minister will decide whether the pro-competition provisions will be allowed to expire, and whether any other pathway to further deregulation should be followed.
In addition, the Minister for Primary Industries has written to all dairy processors to obtain information on the amount of milk solids collected from dairy farms over the 2014-15 season. This is part of the ongoing monitoring of the independent processor thresholds.
Once that information has been obtained, the Ministry for Primary Industries (MPI) will determine whether or not the threshold has been met.
WT/TPR/G/316 – WTO Government's Report
5 MULTILATERAL INITIATIVES 5.1 The World Trade Organization Paragraph 5.6, page 11
EU question No 37: With a view of the Secretariat report (2.11) that the Executive cannot change New Zealand's domestic law by becoming party to a treaty, could New Zealand provide further information that apart from depositing of its instrument of accession to the GPA what other changes of its domestic legislation and/or implementing provisions are foreseen in connection for New Zealand to comply with its commitments in the GPA?
In implementing the provisions of the GPA and prior to deposit of the Instrument of Accession, New Zealand is updating its government procurement regulatory framework so that all entities included in New Zealand's final offer are required to comply with the GPA commitments.
4.5 Investment policy Paragraph 4.16
EU question No 38: What is the average time required for an investor to get a decision regarding a potential investment from the OIO?
In relation to consent applications that were decided in 2014, the average processing time with the OIO was 48 working days; the average time with applicants (as a result of further information requests made by the OIO) was 36 working days, and the average time with Ministers for decision was 16 working days. Note that only 36.5% of the decisions were made by Ministers in 2014, the balance (or 63.5%) were decided by OIO officials under a delegation from the Ministers. Where the decision was made by the OIO, the decision-making time is included under the days for average processing time with the OIO.
7 BILATERAL AND REGIONAL TRADE AGREEMENTS Paragraph 7.3, page 14
EU questions No 39 and 40: Parties to AANZFTA signed the First Protocol to amend AANZFTA in August 2014, streamlining rules of origin. Can New Zealand describe the procedures for creating
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The First Protocol to Amend AANZFTA is a treaty-level amendment to AANZFTA and as such requires parties to undergo the full treaty making ratification process.
The Protocol addresses a number of issues identified by traders and AANZFTA Parties which include: the unnecessary disclosure of potentially sensitive commercial information on Certificates of Origin where that information had no relevance to the claim for preference; the difficulty locating the appropriate rule of origin to determine whether a good is eligible for preferential duty rates; the inability to modify the requirements for information on a Certificate of Origin as needed, without going through a full treaty change process; and challenges faced by some parties to complete tariff and Product Specific Rules of Origin (PSR) transposition.
The Protocol makes four core amendments: 1. Removal of the requirement for exporters to include the Free on Board (FOB) value of goods on Certificates of Origin when not using a value based rule to claim preference; 2. Removal of the 'general rule' for rules of origin in favour of a consolidation of PSRs for all products in a comprehensive Annex; 3. Removal of the List of Data Requirements (Certificate of Origin content) from the treaty text, so that the list is easier to amend; and 4. Establishment of procedures to be followed to expedite future transpositions of the tariff and Product Specific Rules (PSRs) schedules following changes World Customs Organization Harmonised System (HS) tariff classification.
Although the Protocol has been signed, parties are continuing to work through the necessary implementation arrangements for the Protocol, including the new Certificate of Origin requirements.
The Protocol does not change any of the preferences under the Agreement but introduces new procedures to ensure that administrative revisions are expedited in an efficient manner, removes some unnecessary information requirements and streamlines the presentation of the product specific rules of origin to make the Agreement more user-friendly for business.
There are no other amendments of AANZFTA currently being worked on.
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SINGAPORE
PART 1: QUESTIONS REGARDING THE SECRETARIAT REPORT
Para 2.60, Foreign Investment Regime (Pg 36)
"2.60. In the five years to June 2013, 755 investment applications were screened by the OIO, of which 655 were approved, 47 withdrawn, 33 lapsed, and 10 declined. All the 10 declined applications involved sensitive land cases. No applications regarding significant business assets alone were declined. During the same period, the OIO also undertook 2,196 monitoring exercises to assess post-transaction compliance with conditions; 2,096 were found to be complying, 78 did not require complete monitoring, 17 did not comply, and five partially complied. The OIO publishes average assessment times over a 12 month period on its website. This information is updated at the end of each month."
Question:
What were the implications for the investors and their investments which were found to be non-compliant or partially compliant with OIO's investment conditions?
It is an offence under section 45 of the Overseas Investment Act 2005 to fail to comply with a consent condition. The maximum penalty for a breach of section 45 is a NZ$100,000 fine. The response of the Overseas Investment Office (the regulator that administers the Act) to non-compliance or partial compliance depends on the severity of the breach, the reasons why the breach occurred, and whether the breach can be resolved in due course. Minor breaches that can be quickly resolved may only result in increased monitoring or a written warning. More serious breaches (which are uncommon) may result in court proceedings being filed by the Overseas Investment Office (either by way of prosecution or a civil penalty). The New Zealand High Court can also order the disposal of property if the Court is satisfied that an offence or contravention of the Act has been committed.
Para 3.186 - under Section 3.4.6 Intellectual Property Rights (Pg 67)
"3.186. A new Patents Act 2013 came into force in September 2014 and replaced the Patents Act 1953. The new Act brings the New Zealand patent law into closer alignment with New Zealand's trading partners. Several changes were made within the scope of patents registration, including stricter examination of applications and subject matter exclusions. It excludes from patentability certain inventions such as: inventions that are contrary to public order or morality, and 'computer software as such', still allowing for patenting of embedded software."
Question:
Could New Zealand please share with us –
(i) the intent/rationale for creating a distinction between these 2 types of software inventions – (i) "computer software as such" and (ii) "embedded software" for patentability purposes under the Patent Act 2013? (ii) In the case where an invention falls under both categories of "computer software as such" and "embedded software," would New Zealand allow the invention to be patented?
The Patents Act 2013 does not make a distinction between 'computer software as such' and 'embedded software'. Under section 11(1) and (2) of the Patents Act 2013, a computer program 'as such' is not considered to be an invention for the purposes of the Act and hence not patentable.
Section 11(3) provides that an alleged claimed invention will be considered to relate to a computer program 'as such' if the contribution made by the alleged invention lies solely in it being a computer program. In identifying the contribution the Commissioner of Patents or the court must consider the following (see s11(4) of the Patents Act 2013): (a) the substance of the claim (rather than its form and the contribution alleged by the applicant) and the actual contribution it makes;
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(b) what problem or other issue is to be solved or addressed; (c) how the relevant product or process solves or addresses the problem or other issue; (d) the advantages or benefits of solving or addressing the problem or other issue in that manner; (e) any other matters the Commissioner or the court thinks relevant.
Para 3.187 - under Section 3.4.6 Intellectual Property Rights (Pg 67)
"3.187. Moreover, since 2009 amendments have been made to the main existing intellectual property laws. In 2011, the Copyright (infringing sharing file) Amendment Act brought a significant change to the Copyright Act 1994 by providing rights owners with a special regime for taking enforcement action against people who infringe copyright through file sharing. The Designs Amendment Act 2010 provides procedures for restoration of lapsed copyright in registered designs and lapsed design applications."
Question:
(i) Could New Zealand please share further details of the special regime provided to rights owners for enforcement action against people who infringe copyright through file sharing? (ii) Does "file sharing" in this case refer to the sharing of (a) physical goods only, or (b) digital goods only (e.g e-books), or (c) both physical and digital goods or (d) others? We would also appreciate further details on how a "file sharing" case is determined.
The Copyright (Infringing File Sharing) Amendment Act came into force in 2011. Sections 122A to 122U were added to the Copyright Act 1994 (the Act) to provide a process to deal with copyright infringements that occur via file sharing networks. Under the process, rights owners can:
• Request that an internet protocol address provider (IPAP) sends up to three infringement notices to an internet account holder who is alleged to have infringed copyright via a file sharing network; • Take a claim of up to $15,000 to the Copyright Tribunal after the notice process is complete.
The Government has published information which outlines the regime and its operation. Several documents can be found here: http://www.med.govt.nz/business/intellectual- property/copyright/notice-process-under-sections-122a-to-122u-of-the-copyright-act-1994
The regime only applies to digital infringing copies made via peer-to-peer file sharing networks (such as BitTorrent). Cases are heard by New Zealand's Copyright Tribunal. The first case was decided in 2013. Decisions are publicly available here: http://www.nzlii.org/nz/cases/NZCopyT/.
Paras 3.12 and 3.17 - Under section 3.2.1 Registration, customs procedures and requirements (Pg. 40-41)
Under para 3.12, it is stated that import entry clearance for consignments greater than NZ$1,000 "must be lodged no later than 20 days of the arrival of goods in New Zealand. In practice, most entries are lodged in advance of arrival." It is further mentioned in para 3.17 that New Zealand's risk management system is reinforced through the "Electronic clearance of customs declarations prior to the physical arrival of the goods, which has enabled NZCS to decouple border control from physical movement across the border, and enable risk assessment in advance of arrival".
Question:
What is the proportion of imports for which the relevant customs declarations are received in advance (i.e. prior to arrival)? In cases where this information is not provided in advance, does New Zealand face any challenges in conducting its advance risk assessment?
Under the Customs and Excise Act 1996, an import clearance is required to be lodged within 20 days of the arrival of goods into New Zealand. Goods are not released to the importer until this documentation has been lodged and a risk assessment has been undertaken by Customs.
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Data from a time release survey undertaken in 2010 indicated that 74% of Import entries for sea cargo were lodged and cleared before the arrival of the vessel carrying that cargo, while 49% of Import entries for air cargo were lodged cleared before the arrival of the aircraft carrying that cargo. This cargo was in effect risk assessed and cleared for release by Customs before it arrived in New Zealand. The balance was risk assessed once the import documentation was lodged.
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JAPAN
Report by New Zealand (WT/TPR/G/316)
5 MULTILATERAL INITIATIVES 5.1 The World Trade Organization
(Question 1: Page 11, Paragraph 5.3)
The New Zealand Government's report reads "New Zealand welcomed the conclusion of the WTO Trade Facilitation Agreement in Bali in December 2013 and the adoption of the Trade Facilitation Protocol of Amendment the following December. New Zealand is currently working to complete its domestic procedures to enable it to submit its instrument of acceptance but is pleased to note that practical implementation is already well under way on the ground." In light of this statement, how is New Zealand's domestic process for accepting the Protocol on the TFA progressing? When does New Zealand anticipate being able to notify the WTO of its acceptance of the Protocol on the TFA?
New Zealand is currently working to complete its domestic procedures to enable it to submit its instrument of acceptance of the Protocol. New Zealand expects to deposit its Notification of Acceptance of the Protocol in advance of the 10th WTO Ministerial Conference to be held in Nairobi in December this year.
Report by the Secretariat (WT/TPR/S/316)
3 TRADE POLICIES AND PRACTICES BY MEASURE 3.2 Measures Directly Affecting Imports 3.2.6 Anti-dumping, countervailing, and safeguard measures 3.2.6.2 Safeguards
(Question 2: Page 51, Paragraph 3.69)
Regarding safeguard measures under the WTO rules, please provide the details of the product, if any, of which the amount of exports from New Zealand has decreased as a result of applying a safeguard measure.
Safeguard actions are normally applied to all exporters, so it is not always possible to determine the extent to which New Zealand exports might have been affected by actions in the past. However, New Zealand exports were the target of safeguard action taken by the United States against lamb meat in 1998. Other actions which affected New Zealand exports were global safeguards by the US against steel in 2001 and by Korea against dairy products in 1996 and possibly also actions by Chile against imports of milk and cheese in 2006 and 2009.
(Question 3: Page 51, Paragraph 3.70)
Please explain the application of bilateral safeguard measures allowed by certain FTAs. Has New Zealand imposed a bilateral safeguard measure, or, has the other party of the FTAs applied a bilateral safeguard measure?
New Zealand has neither imposed an injury-based bilateral safeguard measure nor been the subject of a bilateral injury based safeguard measure imposed by the other party of an FTA under which such a measure is permitted.
3.4 Measures Affecting Production and Trade 3.4.6 Intellectual property rights
(Question 4: Page 71, Paragraph 3.194)
Does New Zealand have a schedule to ratify the Anti-Counterfeiting Trade Agreement (ACTA)? If not, please explain which provision(s) of ACTA is (are) inconsistent with the laws and regulations of New Zealand.
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In June 2011, the New Zealand Government took a decision to sign ACTA, but in doing so deferred taking any decision regarding the ratification of ACTA. New Zealand does not, therefore, have a schedule to ratify ACTA. A copy of that decision and an analysis of the inconsistencies between ACTA and New Zealand's intellectual property enforcement laws can be found at http://www.med.govt.nz/business/intellectual-property/pdf-docs-library/intellectual-property- enforcement/anti-counterfeiting-trade-agreement-acta/acta-cabinet-paper-approval-for-signature- 154-kb-pdf.pdf.
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UNITED STATES
THE SECRETARIAT REPORT (WT/TPR/S/316)
2. TRADE AND INVESTMENT REGIME 2.3 Trade Policy Formulation and Objectives
Page 28, Paragraph 2.10
The report states that "the MFAT actively shares information and consults with domestic interest groups including business people, unions, Māori and NGOs."
Could NZ give a short description on how stakeholder consultations are conducted?
The Ministry of Foreign Affairs and Trade conducts wide-ranging public consultations to raise public awareness and seek stakeholder views. The manner and degree of consultation will depend on the specific matter under consideration, but will usually include government departments, Māori, business groups, non-government organisations, and academics.
MFAT consults in a variety of different ways and shares information in print, by email and online, as well as by meeting with key stakeholders, such as exporters, industry groups and non- government organisations likely to be interested in or affected by the outcomes of Ministry work. Sometimes MFAT will call for submissions on significant pieces of work, which will be open to the general public.
Are such exchanges required by law? If so, please give the legal citation.
Some Acts of Parliament require consultation to be carried out in particular circumstances and in a prescribed manner. This varies depending on the specific legislation.
In general, the Cabinet Manual (7.40) suggests Ministers "consult other organisations such as Māori groups, professional or trade associations, non-government organisations, or community groups, or to engage in a wider process of public consultation with citizens or affected parties, before policy decisions are finalised".
With respect to international treaties, the Parliamentary Standing Orders require a National Interest Analysis to be completed before Parliament considers a treaty, which should include "a statement setting out the consultations which have been undertaken or are proposed with the community and interested parties in respect of the treaty" (Standing Order 398).
Are there specific fora required for these consultations?
As noted above, the manner of consultation will depend on the specific matter under consideration.
Is there provision for official private sector advisors?
The Ministry of Foreign Affairs and Trade does not employ "private sector advisors". Many Ministry staff have expertise and experience in consulting with the private sector.
2.4 Trade Agreements and Arrangements 2.4.1 WTO
Page 29, Paragraph 2.17
We appreciate the support of the Government of New Zealand for prompt ratification of the WTO Trade Facilitation Agreement. Could New Zealand provide an update on when it expects to formally accept the WTO Trade Facilitation Agreement?
New Zealand is currently working to complete its domestic procedures to enable it to submit its instrument of acceptance of the Protocol. New Zealand expects to deposit its Notification of
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Acceptance of the Protocol in advance of the 10th WTO Ministerial Conference to be held in Nairobi in December this year.
2.4.2 Regional trade agreements (RTAs)
Pages 31-32, Paragraphs 2.25
The Secretariat describes New Zealand's extensive preferential trade arrangements through RTAs and GSP, and for LDCs. In light of this:
Could New Zealand indicate what portion of its imports are subject to MFN tariff rates?
58% of New Zealand's tariff lines are MFN duty free. In 2014, 20% of New Zealand's imports (by value) were subject to MFN duty.
In addition, could New Zealand indicate what major trading partners still provide a significant portion of their imports to New Zealand under MFN tariff rates?
The following major trading partners (listed in order of import value in 2014) currently face MFN duties when exporting to New Zealand:
European Union United States Japan South Korea United Arab Emirates
Page 31, Paragraph 2.27
The Secretariat report states that "RTA negotiations for a NZ-Russia-Belarus-Kazakhstan agreement have been recently suspended."
Could New Zealand indicate the nature of the suspension and its plans for resumption of negotiations?
Negotiations on the New Zealand-Russia-Belarus-Kazakhstan free trade agreement have been suspended. It is unclear when re-engagement will occur, but officials will continue to monitor the situation carefully.
3. TRADE POLICIES AND PRACTICES BY MEASURE 3.2 Measures Directly Affecting Imports 3.2.3 Tariffs 3.2.3.1 Applied MFN tariff structure and Table 3.2
Page 43 and Table 3.2
We understand that New Zealand undertook a vigorous program of unilateral tariff reductions over the last twenty years. Those unilateral reforms are very laudable, and we commend New Zealand for maintaining these liberalizations. However, these reductions are not fully reflected in New Zealand's WTO Schedule. Table 3.2 indicates that, on average, New Zealand's bindings are 3-4 times the level of the respective MFN applied tariff rates.
This would appear to offer great scope for tariff binding reductions, to increase transparency and predictability for New Zealand's MFN trading partners. What are New Zealand's plans to move in this direction?
In 2013, the Government took a decision to hold tariffs at current levels until at least 30 June 2017. Over the past 30 years New Zealand has either lowered import tariff levels unilaterally or held them at existing levels and this consistent policy approach provides predictability for New Zealand's MFN trading partners. New Zealand will reduce its bound tariff commitments under its WTO commitments as the result of any outcome of the WTO Doha Development Agenda round of multilateral trade negotiations.
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3.2.4 Other charges affecting imports 3.2.4.1 Other duties and charges
Page 47, Paragraph 3.47
The report lists fees and charges collected by the New Zealand Customs Services (NZCS): a research levy on imports of heavy steel and welding consumables at rates of NZ$10 per tonne of heavy steel, and NZ$0.05 per kilogram of welding consumables; a levy on alcohol products on behalf of the Health Promotion Agency (HPA) at various rates (Table 3.4); a synthetic greenhouse gas (goods) levy on goods containing hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) under the Climate Change Response Act 2002 and the Climate Change (SGG Levies) Regulations 2013 on behalf of the Ministry for the Environment at various rates; a biosecurity risk screening levy collected by NZCS on behalf of MPI at rates that can vary between NZ$12.77 and NZ$18.40 (as per the Biosecurity (System Entry Levy) Order 2010).
Could New Zealand provide information on the research funded by the levy on imports of steel, etc.? What service is rendered for this fee, and to whom? Are any of the other fees applied by value or volume on imports? Are similar fees applied to similar domestic production?
The Heavy Engineering Research Levy is paid to the New Zealand Heavy Engineering Research Association for the Association's use for the purposes of promoting and conducting research and other scientific work into or relating to the heavy engineering industry. More specific purposes are detailed in section 12 of the Heavy Engineering Research Levy Act available at http://www.legislation.govt.nz/act/public/1978/0081/latest/DLM25391.html
The Heavy Engineering Research Levy is paid on the weight of goods produced domestically or imported. The latest rates are contained in the Heavy Engineering Research Levy Notice 2013 http://www.legislation.govt.nz/regulation/public/2013/0227/latest/whole.html#DLM5203411.
In addition to the fees identified in paragraphs 3.45 to 3.47, anti-dumping or countervailing duties may be applied on specific imports in certain circumstances.
The Health Promotion Agency (HPA) levy is payable on both New Zealand manufactured and imported alcohol products. The biosecurity levy is not charged on domestic production, as it does not present a biosecurity risk. The synthetic greenhouse gas (goods) levy is payable by those who import HFC or PFC in goods and motor vehicles from 1 July 2013. The Heavy Engineering Research Levy applies to all imported and locally produced goods specified in Schedule 2 and Schedule 3 of the Heavy Engineering Research Levy Act.
3.3 Measures Directly Affecting Exports 3.3.5 Export promotion and marketing assistance
Page 58, Paragraph 3.118
The Report states that the International Growth Fund (IGF) of NZ$30 million aims to support export businesses with high growth potential. This program appears to be inconsistent with the obligations under Article 3.1(a) of the SCM Agreement.
When will New Zealand bring this program into consistency with its obligations under the WTO by eliminating the export contingency noted in the Report?
The International Growth Fund is not inconsistent with New Zealand's obligations under the SCM Agreement.
Otherwise, please explain how this program is not inconsistent with the obligations under Article 3.1(a) of the SCM Agreement.
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The International Growth Fund is not inconsistent with New Zealand's obligations under the SCM Agreement. There is no export contingency. The aim of the fund is to enhance the capability of firms.
When does New Zealand expect to notify the program which was not included in its last Article 25 of the SCM Agreement Notification (G/SCM/N/253/NZL)?
The International Growth Fund was not notified under in New Zealand's 2013 notification as it did not meet the criteria for notification. Specifically, New Zealand does not consider that the Fund is either specific or that there is a benefit as provided for under the SCM Agreement. There have been no changes to the Fund since 2013 that would change New Zealand's assessment of this fact.
Is it New Zealand's position that this program is not subject to the notification requirements under Article 25 of the SCM Agreement?
Yes.
If so, could New Zealand explain why this program should not be subject to the notification requirements?
See above.
3.3.6 Export credit insurance and guarantees
Page 58, Paragraph 3.121
The Secretariat states, "the New Zealand Export Credit Office (NZECO) continues to provide trade credit insurance and financial guarantee products that complement those available in the private sector for exporters and banks." Accordingly, in its export credits submission for the 2015 WTO Export competition survey (G/AG/W/125/Rev.2/Add.2, dated 19 May 2015), New Zealand provided a description of how premium rates for NZECO's programs vary (question 4) but did not provide the actual annual average premium rates by program.
Can New Zealand provide this information?
The NZECO database records its premium rates but does not have a report that can be used to calculate the average premium rate.
NZECO's database cannot calculate an average premium because such a result has no benefit. Every premium rate is dependent on the unique variables of each transaction e.g. the buyer's country risk classifications (as agreed between the OECD Participants to the Arrangement on Officially Supported Export Credits), the credit rating of the debtor (where you apply a mix of objective financial information along with some subjective analysis regarding management ability and sales forecasts relative to their market), the tenor of the credit term, the terms of the repayment and any risk mitigations.
Especially in regards to NZECO's short-term trade credit insurance product (where NZECO has covered transactions across 60 different countries), there may be annual fluctuations between its average premium rates due to NZECO underwriting a higher percentage of policies into higher risk countries. The export credit guarantee product is also open to wide annual average variations simply because a premium for a 3-year term will be widely different than a 7-year term.
Page 58, Paragraph 3.121
In reference to the description of the New Zealand Export Credit Office in the Secretariat and to the question 8 of the 2015 WTO Export competition survey (G/AG/W/125/Rev.2/Add.2, dated 19 May 2015):
Can New Zealand provide program use for agricultural products by year, instead of aggregated over the time period 2009-2014?
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The agricultural products NZECO supported by year, during the period 2009–2014, were:
2009: Wool, Wine, Meat, fruit, dairy
2010: Wool, Meat, seafood, pelts, fruit, wine, honey, dairy
2011: Breeding cattle, seeds, Meat, Wool, dairy, seafood
2012: Meat, seeds, wool, honey, fruit, dairy, seafood
2013: Wine, wool, fruit, honey, logs
2014: Fruit, seeds, dairy, wool, wine, pelts
3.4 Measures Affecting Production and Trade 3.4.5 Government procurement 3.4.5.3 Foreign participation
Page 66, paragraph 3.177
The Secretariat report states that "Upon ratification by New Zealand, the GPA is set to apply to procurement of goods, services, and construction works by a list of entities from central and sub-central government agencies, as well as other entities such as state-owned enterprises (SOEs). Ratification of New Zealand's accession to the GPA entails a Parliamentary treaty examination process that is currently under way. The Agreement will enter into force for New Zealand on the thirtieth day following the deposit of New Zealand's instrument of accession to the Director-General of the WTO."
Could New Zealand please update WTO Members on the status of Parliament's examination of the GPA accession and a description of any other formalities necessary to authorize New Zealand to deposit its instrument of accession?
The Parliamentary treaty examination process has been completed and we are now finalising domestic implementation. This includes completing the necessary steps to ensure that all New Zealand government entities, including State Owned Enterprises (SOEs), which have obligations under the GPA, are bound to comply with these obligations under New Zealand domestic law. We are on target to complete these steps within the time allowed by the GPA Committee decision.
4 TRADE POLICIES BY SECTOR 4.2 Agriculture, Forestry, and Fisheries 4.2.2 Border measures
Page 75, Paragraph 4.20:
The Secretariat report states, "The kiwifruit industry is the only sector where export management measures remain. Under the Kiwifruit Industry Restructuring Act (KIRA) 1999 and the Kiwifruit Export Regulations 1999, the regulator, Kiwifruit New Zealand (KNZ), has given the Zespri Group Ltd. an automatic but not sole right to export kiwifruit to all markets except Australia. All other traders wishing to export kiwifruit to markets other than Australia must get prior approval from KNZ in order to export the fruit. This gives Zespri a quasi-monopoly on exports to markets other than Australia. Traders can export kiwifruit to Australia without prior approval from KNZ and independently from Zespri. No significant changes were made to the KIRA or the Regulations during the review period. Between 2009/10 and 2012/13, Zespri accounted for more than 97% of total exports of kiwifruit each year."
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Does the NZ Government have plans to change the legislation regarding the Kiwifruit sector in NZ?
There are no plans to reform the current export management arrangements for the New Zealand kiwifruit sector. Zespri Group Limited receives no distorting subsidies, tax advantages, special financing, preferential access to foreign exchange or any other support from the New Zealand government.
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BRAZIL
PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT
3.2.6.1 – Anti-dumping and countervailing measures Page 50 (Para 3.59)
Questions:
1. The 2012 Amendment to the Dumping and Countervailing Duties Act suspended existing anti-dumping duties on residential building materials and suspended the application of any new anti-dumping duties on imports of residential construction materials. Does New Zealand apply a public interest analysis to support these kind of suspensions?
The amendment was made in 2014 and was the first time that New Zealand has used primary legislation to suspend anti-dumping duties. Public interest considerations were taken into account when Cabinet decided to use a legislative amendment to suspend the anti-dumping duties on resident building materials. These public interest considerations were primarily to lower the cost of constructing residential housing. Cabinet has also recently approved the adoption into New Zealand's anti-dumping and countervailing duties regime of a bounded public interest test, which will apply to all products. The adoption of a bounded public interest test must be made through an amendment to legislation and is therefore subject to approval through the usual parliamentary process.
2. Does New Zealand have any anti-circumvention legislation currently in force?
New Zealand does not have any specific anti-circumvention legislation currently in force.
2. TRADE AND INVESTMENT REGIME
Page 32 (Para 2.29) Paragraph 2.29 mentions the participation of New Zealand in the negotiations of the Trans-Pacific Partnership (TPP). According to information available, one of the subjects raising particular concern among negotiating countries is the chapter on intellectual property rights.
Question: (i) Do the negotiating countries intend to include provisions ensuring that the resulting text of the agreement does not encroach on the exceptions and limitations to intellectual property rights of the TRIPS Agreement, in particular those related to public health? Please elaborate.
We are unable to comment on the details of FTAs under negotiation, but can confirm that in all trade agreement processes New Zealand seeks provisions that protect the Government's right to regulate for legitimate public policy interests, including health.
3. TRADE POLICIES AND PRACTICES BY MEASURE
Page 67 (Para 3.186) Paragraph 3.186 describes the procedures for obtaining a patent right in New Zealand. Additionally, it is of notice that New Zealand signed the "Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization", adopted by the Conference of the Parties to the Convention on Biological Diversity at its tenth meeting on 29 October 2010 in Nagoya, Japan.
Questions: (i) Has New Zealand experienced cases of misappropriation of genetic resources thus far? If so, what measures have been undertaken by the public authorities?
New Zealand has not yet signed the Nagoya Protocol. Accession to and implementation of the Nagoya Protocol is currently under discussion by the New Zealand government. These discussions are being thoughtfully undertaken to ensure implementation is consistent with the principles of the
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Treaty of Waitangi. No national-level cases relating to misappropriation of genetic resources have come to our attention thus far.
(ii) Does the Government of New Zealand plan to include a requirement that patent applicants provide information regarding the origin of the genetic resources and traditional knowledge involved in patent applications? If not, how would the Government of New Zealand address cases of misappropriation of genetic resources in patent applications?
The New Zealand Government has not made a decision on whether to include a requirement that patent applicants provide information regarding the origin of the genetic resources and traditional knowledge involved in patent applications. Including a disclosure requirement was a recommendation made to the Government by the Waitangi Tribunal in its report "Ko Aotearoa Tēnei" (the Wai 262 Report). The Government is still considering its response to the Wai 262 Report.
You can find a copy of the Wai 262 Report here: https://forms.justice.govt.nz/search/Documents/WT/wt_DOC_68356416/KoAotearoaTeneiTT2Vol1 W.pdf. Disclosure of origin is discussed on pages 203-206. The recommendations relating to disclosure are on page 212.
The Government currently addresses cases of misappropriation of genetic resources through the Patents Māori Advisory Committee, which was established under the Patents Act 2013. The Commissioner of Patents may seek advice from the Māori Advisory Committee on whether an invention claimed in a patent application is:
(i) derived from Māori traditional knowledge or from indigenous plants or animals; and if so, (ii) whether the commercial exploitation of that invention is likely to be contrary to Māori values.
Any advice provided to the Commissioner is not binding on the Commissioner. The advice provided by the Māori Advisory Committee assists the Commissioner determine whether a claimed invention is novel or inventive, or contrary to morality (which may include that the commercial exploitation of the invention would be likely to be contrary to Māori values).
Page 86 (Paragraph 4.77) 4.77. An overseas incorporated entity wishing to register as a branch in New Zealand must have bank status in its home jurisdiction and the approval of its home supervisor to carry out banking activities in New Zealand. Branches of overseas banks are not subject to minimum capital requirements, but the parent bank must demonstrate that it meets the prudential requirements, including minimum capital standards, imposed on it by its home supervisor. However, the RBNZ may require a foreign bank to operate through a locally incorporated entity rather than a branch in certain circumstances, i.e. when the bank is systemically important; when the bank intends to take retail deposits in New Zealand and there is depositor protection in the bank's home jurisdiction; or when supervisory arrangements (including disclosure requirements) and market disciplines in the home jurisdiction are deemed inadequate.
Questions:
1. How do New Zealand financial authorities identify other jurisdictions inadequacy on supervisory arrangements and market disciplines? Is there a public list? Or are there casuistic evaluations?
There is no public list of jurisdictions that are considered to have inadequate supervisory arrangements or market discipline for these purposes. In considering this issue, the RBNZ conducts an internal review of the regulatory requirements, supervisory arrangements, and disclosure obligations that apply in the bank’s home jurisdiction. These types of assessments are carried out on a case by case basis and are just one of several factors that the RBNZ takes into account when deciding whether to register a branch as a bank in New Zealand.
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2. Is it allowed the establishment of branches of overseas banks whose parent banks are established in countries recognized as tax havens, even if they could be considered as shell banks?
Any application to register a branch as a bank in New Zealand will be considered on its merits, but final decisions rest with the RBNZ. As indicated, there is no public list of jurisdictions from which we will not allow an overseas bank to register as a branch.
However, we would not contemplate the registration of a "shell bank" as that term is commonly interpreted. It may also be difficult in general for the RBNZ to be convinced that a "tax haven" type jurisdiction would impose an adequate level of supervision or market discipline. In addition, we note that in deciding whether to register a bank, the RBNZ will consider its ownership structure. Amongst other things the RBNZ will need to be satisfied that the owners of a bank will have incentives to monitor its activities closely and influence its behaviour in a way that will improve or maintain its soundness (these kinds of incentives are likely to exist where the owners have made a substantial financial commitment to the bank and where there may be reputational consequences for the owners if problems were to become evident in the bank).
Page 86 (Paragraph 4.78) 4.78. The RBNZ closely monitors banks compliance with the prudential supervision regime, but does not guarantee banks against failures. Currently, there is no formal deposit guarantee scheme. In the event that a registered bank fails, the RBNZ will seek to avoid significant damage to the financial system. It may act as the lender of last resort and also use its crisis management powers, which include giving directions to a registered bank that is in difficulties, and recommending that a bank in financial distress be placed under statutory management.
Question:
3. In case of bankruptcies, what are the RBNZ main strategies to cope with bank runs?
In the event that the RBNZ’s crisis management powers (issuing directions, lender of last resort, statutory management, etc.) are insufficient to manage the risk of a bankruptcy and a consequent bank run, the RBNZ has the option of recommending the adoption of an Open Bank Resolution (OBR). In an OBR, the bank is closed overnight and a statutory manager is appointed. An estimate of the bank’s losses is made, and a proportion of creditors’ funds sufficient to cover these losses is frozen. The Bank then reopens that next day, with creditors being able to access the unfrozen portion of their funds, which are then guaranteed by the Government.
PART III: OTHER QUESTIONS
There is no reference to TiSA (Trade in Services Agreement) in the Secretariat or the Government Reports, despite its relevance to the future of trade in services and the GATS system.
Questions:
4. How does New Zealand coordinate/reconcile post financial crisis guidelines strengthening financial regulation (G20, FSB, BIS, Basel III) and financial services liberalisation on TiSA negotiation?
New Zealand is not a member of the Basel Committee, FSB, or G20 but supports the underlying rationale of the reforms promoted by these bodies in recent years. New Zealand’s approach has generally been to adopt international standards at an early stage, but sometimes subject to refinements to reflect New Zealand conditions.
New Zealand considers it is possible to balance an outcome on financial services in TiSA, with the maintenance of a robust regulatory environment that protects the integrity of domestic and international financial systems and complies with international best practice. More specifically, all of New Zealand’s free trade agreements have included an exception for prudential regulation which ensures the government retains the right to institute and amend any regulation to protect investors and depositors or to ensure the integrity and stability of the financial system more broadly. New Zealand considers that this is the key mechanism for dealing with any circumstances where there may be a conflict between achieving the desired objectives around trade and financial stability.
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5. In the New Zealand perspective, is TiSA intended to be a plurilateral negotiation or a future multilateral agreement?
As a long-time proponent of the multilateral trading system and services trade liberalization, New Zealand supports a TiSA that is capable of being multilateralized. TiSA is open to all WTO Members who share the current participants' high level of ambition for the liberalisation of trade in services.
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CHILE
PREGUNTAS DE CHILE - TPR NUEVA ZELANDIA 2015
Informe de la Secretaría: WT/TPR/S/316
I.- 4.5.1) Características y compromisos multilaterales. Página 98, párrafo 4.64. Se señala:….las inversiones de "personas extranjeras" por un monto superior a un umbral determinado deben ser autorizadas con arreglo a las disposiciones de la Ley de Inversiones Extranjeras de 2005.
Pregunta 1) Chile agradecería si Nueva Zelandia pudiese indicar cuál es ese umbral determinado, y cuáles son los requisitos para acceder a la autorización.
II.- Sección 3) Políticas y prácticas comerciales por medidas, 3.4) Medidas que afectan la producción y el comercio, 3.4.4) Comercio de Estado y empresas comerciales del Estado. Página 73, párrafo 3.156. Se señala: "…, Zespri Group Limited es la única empresa comercial del Estado de Nueva Zelandia." y Sección 4) Políticas comerciales por sectores – 4.2) Agricultura, silvicultura y pesca, 4.2.2) Medidas en frontera, 4.2.2.2) Medidas relacionadas con la exportación. Página 89, párrafo 4.20. Se señala: "La industria del kiwi es el único sector en que siguen aplicándose medidas de gestión de las exportaciones."
"Esta disposición confiere a Zespri el cuasimonopolio de la exportación de kiwis a mercados distintos del australiano."
"…. Entre 2009/2010 y 2012/2013 más del 97% del total de las exportaciones de kiwis correspondió a Zespri."
Preguntas: Tomando en cuenta que la empresa comercial del Estado neozelandés ZESPRI – principal exportador de kiwi del mundo – se ha visto envuelta en investigaciones en mercados de destino (por fraude aduanero y conductas anticompetitivas), el Gobierno de Chile está interesado en saber si:
Pregunta 2) ¿Está en conocimiento el Gobierno de Nueva Zelanda de la conducta empresarial del monopolio estatal de ZESPRI en los mercados de destino? Pregunta 3) ¿Existe algún mecanismo de control a disposición del Gobierno de Nueva Zelanda, que permita prevenir que una empresa comercial el Estado cause efectos desfavorables en los mercados de destino; en particular respecto de prácticas anticompetitivas en desmedro de los productores y exportadores de otros países proveedores, y de los consumidores locales?
Pregunta 4) De no existir un mecanismo como el descrito en la pregunta anterior, ¿Tiene contemplado el Gobierno de Nueva Zelanda establecer algún tipo de control de esta naturaleza?
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QUESTIONS FROM CHILE – TPR NEW ZEALAND 2015
Secretariat Report: WT/TPR/S/316
I.- 4.5.1) Features and multilateral commitments. On page 98, paragraph 4.64, it states that: "Investments by "overseas persons" over a specified threshold require consent under the Overseas Investment Act 2005."
Question 1) Chile would be grateful if New Zealand could indicate what the specified threshold is, and what the requirements to gain consent are.
Relevant thresholds are set out in the Overseas Investment Act 2005.
Investments in "significant business assets" require approval if the value of the securities, or the price paid for the assets, or the value of the New Zealand assets of the target company (including its subsidiaries) exceeds NZ$100 million. If the significant business asset acquisition takes the form of the establishment of a new (green fields) business, the threshold of NZ$100 million is based the total expenditure that is expected to be incurred in establishing the business before the business is commenced. Different thresholds apply to Australian investors consistent with the New Zealand-Australia CER Investment Protocol.
Land is "sensitive land" if it sensitive under Part 1 of Schedule 1 of the Act. Part 1 of Schedule 1 sets out land area and land type thresholds.
There is no threshold that applies to fishing quota investments (all acquisitions of fishing quota by overseas persons are captured). The overseas investment fishing provisions are found in sections 56 to 58 of the Fisheries Act 1996.
II. – Section 3) Trade policies and practices by measure, 3.4) Measures Affecting Production and Trade, 3.4.4) State trading and state-owned enterprises. On page 73, paragraph 3.156, it states that:
"Zespri Group Limited is the only state-trading enterprise (STE) in operation in New Zealand."
And
Section 4) Trade policies by sector – 4.2) Agriculture, Forestry, and Fisheries, 4.2.2) Border measures, 4.2.2.2) Export measures. On page 89, paragraph 4.20 it states that:
"The kiwifruit industry is the only sector where export management measures remain."
"This gives Zespri a quasi-monopoly on exports to markets other than Australia."
"…Between 2009/10 and 2012/13, Zespri accounted for more than 97% of total exports of kiwifruit each year."
Questions: Taking into account that Zespri, the state-trading enterprise of New Zealand and main exporter of kiwifruit in the world, has been implicated in investigations in destination markets (regarding customs fraud and anti-competitive behaviour), the Government of Chile would like to know the following:
Question 2) Is the New Zealand Government aware of the business conduct of state monopoly Zespri in destination markets?
Zespri Group Limited is a private commercial entity, and like all businesses is necessarily subject to the laws of any market in which it operates. The New Zealand Government has no equity shares in Zespri Group Limited, and it is not a Government owned commercial entity. As with all New Zealand businesses, the New Zealand Government expects Zespri Group Limited to always operate within the law.
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Question 3) Is there a control mechanism available to the New Zealand Government that may prevent a state-trading enterprise from causing undesirable consequences in destination markets, in particular with regard to anti-competitive practices to the detriment of producers and exporters of other supplier countries, and local consumers?
Zespri Group Limited is a private commercial entity, and like all businesses is necessarily subject to the laws of any market in which it operates. Zespri Group Limited competes on the global market for horticultural products. Zespri Group Limited receives no distorting subsidies, tax advantages, special financing, preferential access to foreign exchange or any other support from the New Zealand government.
Question 4) If there is no such mechanism, has the New Zealand Government considered establishing any type of control to this effect?
See previous response.
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COSTA RICA
PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT
Page 41 (paragraph 2.60)
2.60. En los cinco años transcurridos hasta junio de 2013, la Oficina de Inversiones Extranjeras examinó 755 solicitudes de inversión; de ese total, se aprobaron 655 solicitudes, se retiraron 47, 33 caducaron y 10 fueron denegadas. Todas las solicitudes denegadas tenían que ver con tierras sensibles. No se denegó ninguna solicitud que guardase relación únicamente con activos comerciales importantes. Durante el mismo período, la Oficina llevó a cabo 2.196 evaluaciones para controlar el cumplimiento de las condiciones con posterioridad a la transacción. Se determinó que en 2.096 casos se habían cumplido las condiciones; en 78 no era necesario realizar un control completo; en 17 no se habían cumplido las condiciones y en 5 solo se habían cumplido parcialmente. La Oficina publica en su sitio Web el tiempo medio que demoran las evaluaciones a lo largo de 12 meses. La información es actualizada al final de cada mes.
Page 42 (paragraph 2.61)
2.61. A raíz de un examen realizado en 2009/2010, el Gobierno decidió no modificar la Ley de Inversiones Extranjeras de 2005. Sin embargo, convino en introducir varias modificaciones en el Reglamento de Inversiones Extranjeras de 2005. Así, con efecto a partir de diciembre de 2010, se añadieron dos factores adicionales: un nuevo factor -"intereses económicos"- que tiene por objeto permitir que se determine si la inversión extranjera salvaguarda y promueve suficientemente los intereses económicos de Nueva Zelandia, y un factor "de atenuación", que tiene por objeto permitir que se determine si la inversión extranjera brinda a Nueva Zelandia oportunidades de vigilancia y participación. Además, en diciembre de 2010 se publicó una nueva directiva ministerial en que se aclaraba la política del Gobierno en materia de inversiones extranjeras y, en particular, los factores de la "prueba de beneficios" que pueden tener mayor o menor importancia en la evaluación de determinados tipos de inversiones. Se considera que mediante esas modificaciones, junto con las efectuadas en 2009, se ha logrado un equilibrio adecuado.
Questions:
1. Can New Zealand please explain if the decision to deny foreign direct investment is subject to further review?
If an application for consent is declined, an applicant may seek judicial review of the decision to decline. Judicial review is the review by a judge of the New Zealand High Court of any exercise of a decision-making power, to decide whether or not the decision was lawful or valid.
2. Can New Zealand please further explain what are the elements that the government considers for "economic interests" and "proof of benefits" in the evaluation to determine the feasibility of FDIs?
In Box 2.1, page 35 it is stated that: '"Benefit to New Zealand" is assessed having regard to 21 factors that are listed in section 17 of the Overseas Investment Act 2005 and regulation 28 of the Overseas Investment Regulations 2005'.
The "economic interests" factor referred to in paragraph 2.61 is one of the 21 factors used to assess whether an overseas investment in sensitive land will, or is likely to, benefit New Zealand and is set out in regulation 28(i). Regulation 28(i) reads as follows:
28 Other factors for assessing benefit of overseas investment in sensitive land The other factors that are referred to in section 17(2)(g) of the Act for assessing whether an overseas investment in sensitive land will, or is likely to, benefit New Zealand are as follows:
(i) whether New Zealand's economic interests will be adequately promoted by the overseas investment, including, for example, matters such as all or any of the following:
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TURKEY
THE SECRETARIAT REPORT
1.1. Introduction, p. 10, para. 1.4.
It is mentioned in the Secretariat Report that, "…In particular, a pronounced slowdown in the demand for imported soft commodities from China (New Zealand's largest trading partner) and a strong decline in commodity prices could have a significant impact on New Zealand's growth prospects."
Considering New Zealand's increasing dependency on Chinese demand particularly in soft commodities, could New Zealand explain whether it has any policies or plans to mitigate risks associated with slowing demand from China?
New Zealand's product and market diversification, supported by our FTA agenda, means that we have a solid platform from which to grow our exports over time. We have already diversified our exports away from the traditional agriculture base (e.g. wool, meat and dairy) to include horticulture, wine, forestry, fisheries and aquaculture. This is complemented by a strong niche manufacturing sector in resource-based and high-tech products; and services exports – tourism, education and, more recently, commercial services. We have also diversified our export markets providing exporters with more options should demand from China be curtailed. New Zealand now has trade agreements in force with 15 individual markets, rising to 27 once TPP and GCC negotiations are successfully concluded and including Korea. New Zealand's FTA agenda provides exporters many markets in which to sell their products, including for example the ASEAN region (which is undergoing significant economic and social transformation and is likely to provide an additional source of demand for soft commodities).
Furthermore, the economic reforms of the last 25 years have increased the resilience of the New Zealand economy. New Zealand's domestic economy today, and in particular our agriculture sector, is operating in a much more competitive environment. Further, the combination of flexible exchange rates, labour and product markets have enabled us to weather a number of significant shocks over the last ten years (e.g. the Asian financial crisis, the burst of the technology stock bubble in 2000/01, and most recently the Global Financial Crisis in 2008). New Zealand also has some headroom to accommodate slowing Chinese demand through monetary and fiscal policy, given low levels of public debt and scope for further declines in interest rates – unlike many other developed economies. In addition, our banking system remains well capitalized.
It is also important to note that while slowing Chinese demand over the next few years appears likely (and may lead to more sustainable and balanced growth in the longer term), China's contribution to global economic activity will continue to increase and New Zealand remains well-placed to benefit from the continuing impact on consumption of rising per capita incomes, as well as greater urbanization.
1.7. Trade Performance, p. 20, para. 1.7.2
It is stated in the Secretariat Report that, "The direction of New Zealand's merchandise trade has changed significantly during the review period, with China becoming New Zealand's largest single trading partner, ahead of Australia, and other Asian emerging economies gaining more importance as trading partners. In fact, China's strong and rapidly growing demand for New Zealand's agricultural commodities (in particular dairy and forestry products) has been the major driver of New Zealand's rising commodity export prices and terms of trade in recent years."
Given that China-Australia Free Trade Negotiations have been successfully concluded on 17 November, 2014, could New Zealand elaborate on whether it expects Chinese demand, particularly in dairy and forestry products, to shift from New Zealand to Australia?
New Zealand is very competitive at producing dairy and forestry products. Provided the CHAFTA doesn't disadvantage New Zealand exporters at the expense of their Australia colleagues, we expect continuing Chinese demand for New Zealand exports.
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2.1 Trade and Investment Regime – Overview, pg. 27, para 2.3
It is mentioned in the Secretariat Report that "New Zealand maintains preferential treatment for imports from least developed countries (LDCs) and developing countries (under the GSP)"
Could New Zealand elaborate on the necessary conditions for being a beneficiary of New Zealand's GSP scheme and specify the conditions for graduation from the scheme?
The Generalised System of Preferences (GSP) is an international system of tariff preference designed to promote economic growth of developing countries. In accordance with the GSP, New Zealand grants special treatment to certain goods that are the produce or manufacture of countries recognised as a Less Developed Country (LDC) or as a Least Developed Country (LLDC).
The countries entitled to preferential tariff treatment under GSP are set out in Schedules 1 and 2 to the Tariff (Less Developed Countries and Least Developed Countries) Order 2005. Countries 'graduate' from the GSP programme once they meet certain criteria. Least developed countries are defined by the United Nations as those countries with a per capita Gross National Income (GNI) of no more than US$400. Developing countries are considered by New Zealand to be those countries with a per capita GNI no greater than 70% of NZ's per capita GNI.
The legal authority to change a recipient's preferential tariff status is contained in s7A(1) of the Tariff Act 1988 where by Order in Council a country may be declared to be, or not to be, a least developed country or a less developed country for the purposes of the Act.
2.3. Trade Policy Formulation and Objectives, pg. 28, para. 2.14.
It is stated in the Report that "New Zealand introduced trade as a new sector priority in its Aid Programme in 2014. The purpose is to support Pacific Island Countries build their capacity to trade, including through implementation of the Pacific Agreement on Closer Economic Relations (PACER) Plus, once this is concluded."
Could New Zealand provide detailed information about the "Aid Programme"?
The purpose of New Zealand's aid is to develop shared prosperity and stability in the Pacific region and beyond. Since 2009, New Zealand has successfully reoriented its aid programme to focus on sustainable economic development. Our investment priorities for 2015-2018 across the Pacific include productive capacity building in priority sectors (agriculture, fisheries and tourism) and economic infrastructure (including renewable energy, ICT, and transport). In addition, the New Zealand Aid Programme aims to increase the economic benefits from trade by investing in activities that increase market access for Pacific goods, services and labour, facilitate trade, improve access to finance and support private sector development.
For more information on New Zealand's Aid Programme, see: http://www.aid.govt.nz/.
2.5 Foreign Investment Regime, pg. 35, para. 2.59
It is stated in the Secretariat Report that "For all investments, the relevant Minister or Ministers (or their delegate) must be satisfied that overseas investors, inter alia, have business experience and acumen relevant to the investment, are of "good character" and have demonstrated financial commitment to the investment. In addition, where the investment involves sensitive land, the relevant Ministers (or their delegate) must be satisfied that the investment will or is likely to benefit New Zealand. In relation to investments in fishing quota, the relevant Ministers must be satisfied that the investment will or is likely to be in the national interest (see also Section 4.2.6). Box 2.1 lists the different criteria considered in assessing investment applications."
Could New Zealand provide detailed information about the criteria of "good character" and its implementation?
The criteria for consent in section 16(1)(c) (applies to sensitive land acquisitions) and section 18(1)(c) (applies to significant business asset acquisitions) of the Overseas Investment Act 2005, and section 57G(1)(d) of the Fisheries Act 1996 (applies to fishing quota acquisitions) require that
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"Good character" is not defined in the Overseas Investment Act 2005 or the Fisheries Act 1996. However section 19(1) of the Overseas Investment Act 2005 and section 57I(1) of the Fisheries Act 1996 detail the test for good character:. Section 19(1) is set out below. 19 Applying good character and Immigration Act 2009 criteria (1) For the purposes of sections 16(1)(c) and 18(1)(c), the relevant Minister or Ministers must take the following factors into account (without limitation) in assessing whether or not a person (A) is of good character: (a) offences or contraventions of the law by A, or by any person in which A has, or had at the time of the offence or contravention, a 25% or more ownership or control interest (whether convicted or not): (b) any other matter that reflects adversely on the person's fitness to have the particular overseas investment.
Section 57I(1) of the Fisheries Act 1996 is almost identical to section 19(1).
2.5. Foreign Investment Regime, pg. 36, Box. 2.1
It is mentioned in the Box 2.1. of the Secretariat Report on "Criteria for farm land" that, "In addition to the criteria used for an overseas investment in significant business assets and an overseas investment in sensitive land, any overseas investment that involves farm land must meet an additional requirement – the farm land or farm land securities must be advertised on the open market in accordance with the rules set out in the Overseas Investment Regulations 2005, unless a standing advertising exemption applies, or an specific exemption from the land advertising requirements is sought and granted."
Long term leasing and purchasing of farm lands are controversial issues globally, but also specifically in New Zealand (e.g. announcement of the purchase of Lochinvar Station by Shanghai Pengxin Group Co. Ltd.). Due to increasing number of Chinese attempts to buy farm lands overseas, could New Zealand provide information whether it has approved or rejected any Chinese attempt to purchase farm land in New Zealand?
Please see the table below detailing proposed investments by Chinese interests that have been consented or declined under the Overseas Investment Act 2005 since 2009. This information is publicly available on the Overseas Investment Office's website.
CONSENTS GRANTED TO CHINESE INTERESTS FOR THE PROPOSED ACQUISITION OF AGRICULTURAL LAND Case No Decision Date Owned (%) Applicant Gross Land (Hectares) 201110035 20-Apr-12 100.0000 Milk New Zealand Holding Limited 7,892.52 201320091 31-Jan-14 73.9145 SFL Holdings Limited 10.10 201320041 31-Jan-14 73.9145 SFL Holdings Limited 3,363.01 201320092 31-Jan-14 100.0000 New Zealand Standard Farm Limited 4,563.52 201220079 10-Apr-13 100.0000 O:TU Investments Limited 256.91 201220078 10-Apr-13 100.0000 O:TU Investments Limited 79.63 201310014 03-Jul-13 100.0000 Shanghai CRED Real Estate Co. Limited 188.30 201320093 11-Mar-14 8.0100 Accolade Wines New Zealand Limited 47.76 201420003 14-Nov-14 100.0000 Xindongyue Group NZ Limited 8.11 200920070 16-Nov-09 22.2100 Agria Corporation 80.32 201110005 15-Apr-11 21.6172 Agria (Singapore) Pte Limited 60.01 201320056 20-Feb-14 100.0000 Ling Hai Group Limited 741.58
APPLICATIONS INVOLVING CHINESE INTERESTS FOR THE PROPOSED ACQUISITION OF AGRICULTURAL LAND THAT HAVE BEEN DECLINED Case No Dec Date Owned (%) Applicant Gross Land (Hectares) 201010030 22-Dec-10 28.82 Natural Dairy (NZ) Holdings Limited 2,312.51
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3.1. Overview, pg. 39, para. 3.7
It is mentioned in the Secretariat Report that, "The Zespri Group, a company with special authority for export of kiwifruit, is the only state trading enterprise currently in operation in New Zealand. However, the Government maintains equity shares in several enterprises in various key economic sectors such as energy and transport. According to the authorities, the level of government participation in such enterprises has been falling in recent years."
Could New Zealand clarify how the government affects overseas investment decisions of the Zespri Group and other enterprises Government maintains equity shares in general?
The New Zealand Government has no equity shares in Zespri Group Limited, and it is not a Government owned commercial entity.
In general, Crown-owned commercial entities operate at arm's length from the Government, and have independent boards of directors. The boards are responsible for making decisions on the company's operations, including on overseas investments. Directors of Crown-owned companies are subject to a number of duties under the Companies Act, including the duty to act in the best interest of the company.
Shareholding Ministers have a number of powers: if a company requests equity funding from shareholders, the shareholding Ministers have discretion as to whether to provide it under the Companies Act, proposed transactions over a certain threshold (50% of the value of the company's assets) are "major transactions" that require the approval of a majority of shareholders shareholding Ministers also expect companies to consult them on transactions above a (lower) threshold. However this is consultation only; the boards are expected to seek out the views of shareholding Ministers and consider them, but are still responsible for making their own decisions under the State Owned Enterprises Act, shareholding Ministers have certain limited powers to direct an SOE to amend its Statement of Corporate Intent (SCI). SOEs must act consistently with their SCI. Ministers cannot direct an SOE to carry out or not carry out a specific action, however they can direct a company with respect to the nature and scope of the activities to be undertaken by it, as set out in the SCI. Such directions are very rare (approximately 8 since the SOE Act was set up in 1986, with the last direction given in 2000) shareholding Ministers also have the power to appoint and remove directors. However directors are independent; members of the Government and public servants are not appointed to the boards of commercial entities
The scope of Ministers powers of direction over SOEs is set out here: http://legislation.govt.nz/act/public/1986/0124/latest/DLM98050.html
3.2.6.1 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – Anti-dumping, countervailing and safeguard measures – Anti-dumping and countervailing measures pg. 50, para. 3.59
It is highlighted in the Secretariat Report that "The 2014 amendment suspended existing anti- dumping duties on residential building materials and suspended the application of any new anti- dumping duties on imports of residential construction materials for three years with effect from 1 June 2014."
Considering Canterbury and Christchurch earthquakes which occurred in 2010 and 2011, respectively, could New Zealand explain whether the context of this amendment is related with the efforts for the acceleration of residential recovery after these earthquakes?
The suspension of anti-dumping duties on residential building materials was done to remove a barrier to competition in the residential housing construction sector, in particular to benefit the Christchurch rebuild but also to benefit increased residential construction expected elsewhere in New Zealand.
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3.2.6.2 Trade Policies and Practices by Measure – Measures Directly Affecting Imports – Anti-dumping, countervailing and safeguard measures – Safeguards, pg. 50, para. 3.71
It is specified in the Secretariat Report that "The Closer Economic Partnership between New Zealand and Hong Kong, China and the Economic Cooperation Agreement between New Zealand and Chinese Taipei, both include a provision where, if either Party imposes a WTO safeguards measure, it shall exclude imports from the other party if such imports are not a cause of serious injury or threat thereof. The New Zealand–Thailand Closer Economic Partnership Agreement, the New Zealand–China FTA and the New Zealand–Malaysia FTA provide that a Party applying a global safeguard measure may exclude imports from the other Parties where those imports are not cause of serious injury. Under the Australia-New Zealand Closer Economic Relations Agreement and the New Zealand–Singapore Closer Economic Partnership Agreement, a Party imposing a global safeguard measure must exclude imports originating from another Party from the measure."
Considering the nature of global safeguard investigations that are initiated against whole imports irrespective of any countries specifically, could New Zealand explain in detail how the assessment about causing a serious injury on a country-by-country basis is made for the mentioned FTA partners?
New Zealand considers that exempting certain imports from a country or countries from a safeguard measure is consistent with our obligations under Article 2.2 of the Safeguards Agreement provided the concept known as "parallelism" is applied to the analysis of whether increased imports have caused serious injury to a domestic industry.
In applying parallelism New Zealand considers that an investigation would first take into account imports of a product from all sources, excluding those from Australia and Singapore. Assuming this demonstrated that increased imports from all sources did cause or threaten to cause serious injury, an assessment would then be made of the imports from each of the countries to which it is contemplated an exemption should apply to determine whether the imports from each country, taken alone, did not cause or threaten serious injury.
The next step would be to remove the imports from the countries which are not a cause of serious injury from the next examination. A determination would then be made of whether the increase of the remaining imports caused or threatened serious injury. If this was the case, then a safeguard measure could be imposed on the remaining imports and an exemption from the measure could be given to imports from those countries which are not a cause of serious injury.
Because New Zealand has not carried out a safeguard investigation since the WTO Agreement on Safeguards came into effect, it has not yet had to apply an analysis on the basis set out above.
3.2.8. Sanitary and Phytosanitary Requirements, pg. 55, para. 3.89
It is stated in the Secretariat Report that, "The Food Act 2014 updates the Food Act 1981. It reforms provisions on trade in food in order to enhance safety and suitability. It also sets guidelines for risk-based measures to improve public health protection. The Act is scheduled to be fully in force by mid-2016".
Could New Zealand explain whether the new Food Act brings any safety measures for exported food products?
The Food Act 2014 covers the sale of food within New Zealand, including food for export. In producing food for sale, food businesses must meet the requirements of the Food Act 2014 and any other applicable requirements. Such businesses must register a Food Control Plan or National Programme demonstrating how they will identify, control, manage and eliminate or minimise hazards or other relevant factors for the purpose of achieving safe and suitable food. Independent verification against the Food Control Plan or National Programme is undertaken.
4.2.6. Fisheries, pg. 79, para. 4.37
It is stated in the Secretariat Report that, "The recently passed Fisheries (Foreign Charter Vessels and other matters) Amendment Act 2014 will prohibit foreign-flagged charter fishing vessels (FCVs) from fishing in New Zealand waters (within the 200 mile limit) from 1 May 2016. At
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- 109 - present, FCVs registered as New Zealand fishing vessels are allowed to fish in New Zealand waters, and there are a number of vessels operating under such provisions, which will need to be reflagged as New Zealand vessels if they are to continue their operations. Fish landed from such vessels is managed according to the charter arrangements between New Zealand company and the foreign vessel owner."
Could New Zealand provide more information about Fisheries Amendment Act 2014 allowing a number of vessels to be reflagged and charter arrangements procedures to be followed after 1 May 2016?
The Fisheries (Foreign Charter Vessels and Other Matters) Amendment Act 2014 will require all foreign charter vessels (FCVs) to reflag to New Zealand from 1 May 2016. The Act is also supported by a number of non-legislative changes to improve the monitoring and enforcement of New Zealand employment, vessel safety and fisheries rules.
The main consequences of the legislation, and associated non-legislative changes, to the current charter arrangement procedures for FCVs are: • The New Zealand operator of the vessel will have to demonstrate that he/she has full possession and control of the vessel, including full accountability for crew welfare, and become the employer of the crew. • All FCVs will have to fully comply with minimum New Zealand vessel safety and workplace standards. • All foreign crew will be required to meet New Zealand fishing vessel crew qualification standards. • All foreign crew will be entitled to receive minimum New Zealand remuneration levels that are paid into New Zealand bank accounts to ensure compliance.
4.4 Trade Policies By Sector – Manufacturing, pg. 82, para. 4.56
It is mentioned in the Secretariat Report that "There has been some diversification towards higher value-added, knowledge-intensive subsectors (e.g. niche electronic goods, new materials and software) in recent years, however, primary food manufacturing (mainly dairy and meat products) and other resource-based industries remain the largest components of manufacturing activity."
Could New Zealand explain which measures were taken in order to achieve diversification towards higher value added products?
New Zealand is an open market economy with sound institutions and good education system. A supportive business environment such as this encourages entrepreneurs to innovate and build new high value businesses. The Government has assisted this process through its Business Growth Agenda which is focused on actions to in develop an ecosystem which is supportive of technology businesses (broadly defined to include both high and medium high technology manufacturing, software and information technology services and knowledge intensive services such as engineering and design). This wide range of initiatives is outlined in the Business Growth Agenda Future Direction, available from http://www.mbie.govt.nz/what-we-do/business-growth- agenda/business-growth-agenda-future-direction-2014 The actions are grouped into the six inputs businesses need to succeed and grow: export markets, capital markets, innovation, skilled and safe workplaces, natural resources and infrastructure. Examples include the establishment of Callaghan Innovation which provides a range of research and development grants to businesses, technical advice, and services such as the Accelerator Programme, designed to support the rapid formation of early stage ICT and digital technology start-ups, and the Incubator Support Programme, which encourages the development of early stage, high-growth businesses to generate employment growth, commercialise intellectual property and grow emerging sectors. See https://www.callaghaninnovation.govt.nz/ for details. Other initiatives include: Government and private sector investment to deliver faster broadband to 97.8% of New Zealanders, with 80% getting Ultra-Fast Broadband through fibre by the end of 2019; establishing new ICT graduate schools in Auckland, Wellington and Christchurch; and increased investment in engineering studies at tertiary institutions to lift graduate numbers by 500 per annum by 2017. In addition, New Zealand Trade and Enterprise assists firms through a range of programmes such as the Beachheads programme, which connects participating companies to a network of private sector advisors in New Zealand and around the world who can act as mentors and provide insights into the realities of growing internationally successful businesses.
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4.4 Trade Policies By Sector – Manufacturing, pg. 83, para. 4.60
It is stated in the Secretariat Report that "There is no overarching official policy specifically targeted at the manufacturing industry. Instead, the New Zealand Government has put in place several programmes to assist businesses in the sector, mainly in the form of financial support, technical advice and R&D funding. The Business Growth Agenda (BGA) outlines Government initiatives to support New Zealand businesses to grow and help create a more productive and competitive economy, while specific programmes are implemented through government agencies."
Could New Zealand provide further information about the abovementioned programmes and whether these programmes are sufficient enough to enhance export competitiveness of New Zealand's manufacturing industry?
New Zealand has a diverse manufacturing sector. Actions have tended to be tailored to different parts of the sector and are generally directed at increasing business expenditure on research and development through R&D grants administered by Callaghan Innovation and develop firms' capability to innovate and export. Callaghan Innovation also provides a range of technical assistance. To assist the development of New Zealand's processed foods export sector, including functional foods and nutraceuticals, the Government has provided funding for the establishment of the New Zealand Food Innovation Network, a national network of science and technology resources created to support the growth and development of New Zealand food & beverage business of all sizes including provision of facilities and the expertise needed to develop new products and process from idea to commercial success. Use of the facilities is on a fee-for-service basis. New Zealand Trade and Enterprise has an extensive network of off-shore offices designed to assist New Zealand manufacturers to establish export markets. Two examples of capability building are the Better by Design programme and The Better by Capital programme. The Better by Design programme helps companies increase their international competitiveness by integrating design principles right across their business. The Design Integration Programme teaches design thinking and the tools of design integration to management teams through a sequence of learning activities. Companies are partnered with experts from the private sector and activities address real company challenges and opportunities. See http://www.betterbydesign.org.nz/. The Better by Capital programme is designed to assist business to become investment ready and identify potential investors in particular to help fund international growth. Both these programmes can be utilised by firms in a wide range of sectors, including manufacturing.
4.5.3.3 Prices, pg. 92, Box 4.2
According to the statement done by New Zealand Commerce Commission, it is mentioned that "Most customers buy broadband together with phone services in a bundle, and bundles were priced 30% higher than the OECD average although dropped 14% over two years."
Could New Zealand explain the reason behind these practices in terms of national and international retail prices of fixed-line phone and broadband services?
These are retail prices which were driven by the level of competition in retail markets at that time, and also influenced by the regulated forward-looking cost-based wholesale price set by the Commerce Commission.
Prices for broadband plus voice bundles continue to improve in benchmarking. New Zealand retail prices are now right on the average for the 30GB basket and a substantial 22% below average for the 30GB 30Mbps fibre basket, with prices 13-22% above average for 60GB and 150GB 10Mbps DSL plans (Source: Commerce Commission Annual Telecommunications Monitoring Report, 2014).
4.5.4.2 Air transport services and airports, pg. 95, para. 4.121
It is stated in the report that "…The Crown holds a 52.3% stake in Air New Zealand. It also holds a preferential "Kiwi share", which enables the Government to impose a 10% cap on individual foreign shareholdings… The Crown also holds 100% ownership of Airways Corporation of New Zealand Limited...".
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In different services sectors (such as telecommunication), the Government was accused of distorting competition in the market by referring to Kiwi Share Obligation in the past. Regarding this information, could New Zealand explain the current content of "Kiwi share", with its legal basis and current applications?
The Kiwi Share is a single $1 special rights convertible preference share issued by Air New Zealand to the Crown. It confers certain rights and responsibilities on the holder, the primary intent of which is to protect Air New Zealand's access to other countries under inter-government air services agreements by ensuring that "substantial ownership and effective control" of the airline remains in New Zealand hands. The Kiwi Shareholder is Her Majesty the Queen in Right of New Zealand.
Air New Zealand's Constitution (Article 3.5) sets out the rights and responsibilities of the Kiwi Share and the Kiwi Shareholder. Among other things, the written consent of the Kiwi Shareholder is required in respect of any amendment, removal or alteration of any section, clause or definition specified, including those relating to the name of the company, its place of incorporation, its principal place of business, the location of its head office and the nationality of its directors. The consent of the Kiwi Shareholder is also required: (a) for an owner or operator of an airline business to hold or have an Interest in an Equity Security in the company; and (b) for a non-New Zealand national to hold or have an interest in shares that confer 10% or more of the total voting rights in the company.
The Kiwi Shareholder's role is separate from the rights exercised by the Minister of Finance, who is responsible for the Crown's holding of 52% of the ordinary shares in Air New Zealand.
THE GOVERNMENT REPORT
2.1 Current Economic Priorities, pg. 6, para. 2.21
It is mentioned in the Government Report that "Infrastructure underpins growth by providing the support of networks demanded by a growing economy. It is a catalyst for growth because it creates new economic opportunities. Infrastructure assets are typically costly and can take many years to plan, commission, build and bring into service. Projecting the future demand for infrastructure is critical to ensuring that the right level of investment is made in the right infrastructure at the right time. Almost NZ$16 billion of assets has been added over the last three years, including investments in roading, rail, ultra-fast broadband, irrigation, electricity transmission and the Christchurch rebuild. Specific priorities include removing bottlenecks on the road network, accelerating Auckland's transport projects, completing the deployment of ultra-fast and rural broadband, rebuilding Christchurch, investing in hospitals and schools, and increasing competition and efficiency in the housing sector".
New Zealand has acceded to the revised WTO Agreement on Government Procurement on 29 October 2014. Although Parliament's treaty examination process has not been completed yet, could New Zealand share information on foreign construction companies' participation and share in construction activities in recent years, particularly in rebuilding activities of Christchurch?
The New Zealand Government does not require businesses to state their location of ownership when bidding for government contracts. It is therefore not possible to provide information on foreign construction companies' participation and share in construction activities in recent years.
7.1 Bilateral and Regional Trade Agreements – Australia New Zealand Closer Economic Relationship, pg. 15, para. 7.10
It is emphasized in the Government Report that "Australia and New Zealand continue to work closely on a range of issues to progress the SEM agenda. A broad range of SEM initiatives have been achieved across the following four themes…"
Could New Zealand express its assessment regarding a possible single market economy between New Zealand and Australia in terms of the possibility of arising "balanced benefits"?
"The joint development of a Single Economic Market (SEM) agenda builds on the Australia New Zealand Closer Economic Relations Trade Agreement (known as CER), which underpins our
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- 112 - close trade and economic relationship. In progressing the SEM New Zealand and Australia are guided by principles which seek to create an efficient, certain and seamless environment for businesses operating in both countries. The outcomes of the SEM agenda are intended to optimise net trans-Tasman benefit.
The SEM agenda has delivered significant economic benefits to both countries by lowering business costs and increasing the ease with which businesses and people can operate across the Tasman. For example:
New Zealand and Australia have worked together closely to coordinate policies and regulations in a number of business law areas: business reporting, competition and consumer policy, corporate law, financial services and reporting, insolvency law and intellectual property. This has included outcomes such as equivalent consumer credit requirements and enforcement regimes, comparable disclosures for investors and other users of financial products in Australia and New Zealand, and mutual recognition for financial advisers.
the CER Investment Protocol reduces compliance costs and provides greater legal certainty for trans-Tasman investors by providing higher thresholds at which foreign investments are to be screened. New Zealand private investors undertaking business acquisitions now benefit from the higher screening threshold of A$1,078 million (indexed annually), up from A$248 million. In exchange, the screening threshold for Australian private investors in New Zealand is now NZ$477 million (around A$442 million, and indexed annually), up from NZ$100 million (around A$93 million).
The introduction of the trans-Tasman retirement savings portability supports and adds to the degree of integration between the two countries by allowing New Zealanders and Australians to consolidate their financial affairs in their country of residence."
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PERU
Sobre la base de lo señalado en el documento WT/TPR/S/316 del 11 de mayo de 2015, el Perú tiene las siguientes preguntas:
Pregunta 1
4. POLÍTICAS COMERCIALES, POR SECTORES 4.2. Agricultura, silvicultura y pesca 4.2.1. Características principales
Párrafo 4.13 - El sector de la agricultura de Nueva Zelandia es un sector orientado hacia el mercado, altamente productivo y con un mínimo de intervención estatal. A raíz de la liberalización del sector en los años ochenta y noventa, prácticamente todos los subsectores de la agricultura actualmente están desregulados, y las antiguas juntas oficiales de comercialización han sido desmanteladas y reemplazadas por organizaciones sectoriales establecidas con arreglo a la Ley de Gravámenes sobre los Productos Básicos de 1990. Las reformas han contribuido a convertir a la agricultura en uno de los sectores más productivos de la economía. Según estimaciones del Ministerio de Industrias Primarias, entre 1984 y 2007 la productividad del sector agropecuario en general aumentó a una tasa compuesta anual del 3,3%, superior a la tasa compuesta anual de aumento de la productividad en el resto de la economía, que fue del 1%.2 (El resaltado es nuestro)
Pregunta - ¿En qué consisten las organizaciones sectoriales establecidas con arreglo a la Ley de Gravámenes sobre los Productos Básicos de 1990 y de qué manera se diferencian con respecto a las antiguas juntas oficiales de comercialización?
Pregunta 2
4. POLÍTICAS COMERCIALES, POR SECTORES 4.2. Agricultura, silvicultura y pesca 4.2.1. Características principales
Párrafo 4.14 - Desde el Examen precedente, la agricultura ha sido objeto de nuevas reformas. Entre los principales acontecimientos en esta esfera cabe mencionar la restructuración de la industria lechera. A nivel institucional, el principal cambio fue la fusión del Ministerio de Agricultura y Silvicultura con el Ministerio de Pesca, que pasaron a integrar el nuevo Ministerio de Industrias Primarias a partir de abril de 2012.3 Entre las funciones del nuevo Ministerio figura la de asesorar al Gobierno en las siguientes esferas: la política agropecuaria y pesquera a nivel nacional e internacional; los resultados sectoriales; el uso sostenible de los recursos naturales; el comercio internacional; cuestiones de política en materia de ciencia e innovación relacionadas con el sector; seguridad alimentaria y seguridad biológica. Además, el Ministerio tiene a su cargo los regímenes reglamentarios en materia de seguridad biológica, salud animal y vegetal y seguridad alimentaria. El Ministerio también tiene a su cargo la aplicación del Plan de comercio de derechos de emisión para la agricultura y administra la Alianza para el crecimiento de las industrias primarias, que es una iniciativa conjunta del Gobierno y el sector de inversión en investigación e innovación encaminada a fomentar el crecimiento y la sostenibilidad de los sectores primario, forestal y de la alimentación. (El resaltado es nuestro)
Pregunta - ¿Qué es el Plan de comercio de derechos de emisión para la agricultura?
2 Información en línea del Ministerio de Industrias Primarias. Consultada en: http://www.mpi.govt.nz/agriculture. 3 Previamente (en julio de 2010) la Dirección de Seguridad Alimentaria se había fusionado con el Ministerio de Agricultura y Silvicultura.
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Pregunta 3
4. POLÍTICAS COMERCIALES, POR SECTORES 4.2. Agricultura, silvicultura y pesca 4.2.6. Pesca
¿Existe en Nueva Zelandia alguna clasificación de los tipos de pesca según ámbito geográfico, tamaño, tipo de aparejos de pesca, otros? De existir, ¿se les aplica algún tratamiento diferenciado en los programas de apoyo y/o de ordenamiento pesquero?
Pregunta 4
4. POLÍTICAS COMERCIALES, POR SECTORES 4.2. Agricultura, silvicultura y pesca 4.2.6. Pesca
Recuadro 4.1 Pesca comercial: régimen de gestión de contingentes de captura
Para cada población de peces se fija el total de capturas permisibles a un nivel compatible con el máximo rendimiento sostenible (es decir, el máximo rendimiento que pueda lograrse sin menoscabar la capacidad productiva de la población a lo largo del tiempo). Después de tener en cuenta la pesca no comercial y la mortalidad de cada población causada por la pesca, se determina el total de capturas permisibles.
Pregunta - ¿Qué institución determina el máximo rendimiento sostenible y con qué periodicidad?
PREGUNTAS ADICIONALES DEL PERÚ AL EXAMEN DE POLÍTICAS COMERCIALES DE NUEVA ZELANDIA
1. Podría detallar Nueva Zelanda, ¿Cuáles son actualmente las 30 órdenes de gravámenes sobre productos básicos? (Párrafo 4.17 Informe de Secretaría).
2. Podría precisar Nueva Zelanda ¿Cuál ha sido el impacto de la implementación de las reformas aplicadas en el sector lácteo? (Párrafo 4.25 Informe de Secretaría).
3. Podría explicar Nueva Zelanda ¿Cuáles son los resultados más destacados sobre el Plan de comercio de derecho de emisiones, para reducir las emisiones de gases de efecto invernadero? (Párrafo 4.29 Informe Secretaría).
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Based on the document WT/TPR/S/316 dated 11 May 2015, Peru has the following questions:
Question 1
4. TRADE POLICIES BY SECTOR 4.2. Agriculture, Forestry, and Fisheries 4.2.1. Main features
Question: What do the industry organisations established under the Commodity Levy Act 1990 consist of, and how do they differ from the old statutory marketing boards?
The Commodity Levy Act 1990 does not establish industry organisations. Industry organisations choose to form a body corporate under generic New Zealand laws like the Companies Act 1993 and the Incorporated Societies Act 1908. Some of those organisations may choose to seek a levy order under the Commodity Levy Act to fund industry-good activities, if the potential levy payers vote to have a levy. These industry bodies are not commodity traders.
Producer Boards were established under their own industry-specific legislation e.g. the former New Zealand Wool Board was established by the now repealed Wool Industry Act 1997 and its powers, structure, functions and means of funding were specified in their own legislation, whereas under the Commodity Levy Act the levy payers (the producers) decide whether to seek a levy order and what activities will be funded out of the levy.
Question 2
4. TRADE POLICIES BY SECTOR 4.2. Agriculture, Forestry, and Fisheries 4.2.1. Main features
Question: What is the Emissions Trading Scheme for agriculture?
The agricultural sector reports biological emissions under the Emissions Trading Scheme. In line with other countries, the sector will only have surrender obligations once economically viable and practical mitigation technologies become available and our trading partners make more progress on tackling their emissions in general.
To address the absence of options for the sector to reduce emissions, New Zealand is at the forefront of the global search for mitigation technologies and was a founding member of the Global Research Alliance on Agricultural Greenhouse Gases. The Government also funds this search through the New Zealand Agricultural Greenhouse Gas Research Centre, the Pastoral Greenhouse Gas Research Consortium and the Sustainable Land Management and Climate Change Research Programme. Industry also funds the Pastoral Greenhouse Gas Research Consortium. This collaborative research is making good progress, including on: animal breeding; low emissions feeds; inhibitors and a vaccine.
As a result of the absence of agricultural subsidies, New Zealand's agricultural products have a relatively low greenhouse gas emissions footprint when compared to other countries. In fact, over the past two decades, New Zealand farmers have improved the emissions efficiency of their beef, lamb and milk by approximately 1% per year on average.
Question 3
4. TRADE POLICIES BY SECTOR 4.2. Agriculture, Forestry, and Fisheries 4.2.6. Fisheries
In New Zealand, is there any classification of the types of fishing according to geographical area, size, type of fishing gear, etc? If so, is differential treatment applied for the purposes of support programmes and/or fisheries regulation?
A fish species can consist of numerous geographically isolated and biologically distinct populations. Each fish species in the Quota Management System is subdivided into separate fish stocks defined
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- 116 - by Quota Management Areas (QMAs). New Zealand currently has approximately 100 species (or species groupings) subject to the QMS. These species are divided into 638 separate stocks. Each stock is managed independently to help ensure the sustainable utilisation of that fishery. QMAs for a species are determined on introduction of that species into the QMS. QMAs are based on a combination of biological and administrative factors at the time of introduction. The starting point for determining QMA boundaries for each species are the ten Fisheries Management Areas (FMAs) which New Zealand's Exclusive Economic Zone (EEZ) is divided up into (for fisheries management purposes). While most species in the QMS are managed independently, sometimes groups of species are considered together for management purposes. These groups tend to be either groups of similar species caught together; or where identification or differentiation by fishers is difficult.
The QMS stock "flatfish" includes seven different species within a defined QMA. There is limited ability, once a stock is introduced into the QMS, for QMAs or stock definitions to change.
Owing to the nature of fish populations some QMAs incorporate multiple FMAs while others cover only part of a single FMA.
There are a number of regulations that limit the type of fishing method that can be used in various areas and at various times – mesh sizes, methods, seasonal closures etc. – these are introduced for sustainability reasons and are designed to protect juvenile stocks and /or breeding areas.
There are a very few fisheries that are classified by the type of fishing – for example, squid has both a trawl and a jig allocation. However, in terms of regulation there is no distinction made in the way that fisheries regulations are interpreted or implemented in these fisheries.
Question 4
4. TRADE POLICIES BY SECTOR 4.2. Agriculture, Forestry, and Fisheries 4.2.6. Fisheries
Box 4.1 Commercial fishing: Quota Management System (QMS)
Question: Which institution determines the maximum sustainable yield and how often?
The Ministry for Primary Industries along with its contracted research providers determines the maximum sustainable yield, guided by the Harvest Strategy Standard for New Zealand Fisheries and associated Operational Guidelines. These are available online at: http://fs.fish.govt.nz/Page.aspx?pk=104. The frequency of updates varies by species.
ADDITIONAL QUESTIONS FROM PERU IN RESPONSE TO TRADE POLICY REVIEW OF NEW ZEALAND
1. Could New Zealand provide details on what the 30 commodity levy orders on basic products currently are? (Paragraph 4.17 Report by the Secretariat)
The list of the 30 Commodity Levy Orders in force is provided below. Each Commodity Levy Order is available in full at: http://www.legislation.govt.nz.
Commodity Levies (Vegetables and Fruit) Order 2013
Commodity Levies (Mussels, Oysters, and Salmon) Order 2013
Wine (Grape Wine Levy) Order 2010
Commodity Levies (Meat) Order 2010
Commodity Levies (Harvested Wood Material) Order 2013
Commodity Levies (Asparagus) Order 2012
Commodity Levies (Avocados) Order 2013
Commodity Levies (Potatoes) Order 2013
Commodity Levies (Nashi Pears) Order 2012
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Commodity Levies (Maize) Order 2012
Commodity Levies (Arable Crops) Order 2012
Commodity Levies (Onions) Order 2013
Commodity Levies (Winegrapes) Order 2010
Commodity Levies (Pipfruit) Order 2012
Commodity Levies (Eggs) Order 2010
Commodity Levies (Tamarillos) Order 2010
Commodity Levies (Milksolids) Order 2014
Commodity Levies (Rock Lobster) Order 2013
Commodity Levies (Paua) Order 2013
Commodity Levies (Foveaux Strait Dredge Oysters) Order 2013
Commodity Levies (Non-proprietary and Uncertified Herbage Seeds) Order 2014
Commodity Levies (Blackcurrants) Order 2013
Commodity Levies (Summerfruit) Order 2014
Commodity Levies (Kiwifruit) Order 2012
Commodity Levies (Cereal Silage) Order 2012
Commodity Levies (Passionfruit) Order 2014
Commodity Levies (Feijoas) Order 2014
Commodity Levies (Citrus Fruit) Order 2014
Commodity Levies (Wheat Grain) Order 2014
Commodity Levies (Paeonies) Order 2012
2. Could New Zealand specify what impact the implementation of the reforms applied to the dairy industry has had? (Paragraph 4.25 Report by the Secretariat)
In 2012, Fonterra moved to a new capital structure model known as Trading Among Farmers. Regulation of Fonterra's capital structure is limited and primarily designed to address competition policy issues.
The intended outcomes of Trading Among Farmers include:
• Greater durability in Fonterra's capital structure because there is no longer a risk of having to redeem unpredictable volumes of shares;
• Promoting a dynamic and contestable dairy industry – liquidity in the Farmers Shareholders Market and Fonterra Shareholders' Fund will lead to a market based fair value share price and stronger incentives against an upward bias in the milk price, which would have a negative impact on competition in New Zealand dairy markets;
• Introducing external capital to the company to broaden the shareholding base to provide access to capital and stronger incentives for the company to make the greatest possible contribution to New Zealand's economic growth; and
• Greater flexibility for farmer shareholders to buy and sell shares and manage cash flow in their farming business.
There are encouraging signs that Trading Among Farmers is delivering on key policy objectives. For example, there is increasing competition in the farm gate milk market.
Trading Among Farmers has only been in place since November 2012. Further conclusions about the impacts of the change will be possible over time.
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3. Could New Zealand explain which are the most significant results of the Emissions Trading Scheme, aiming at reducing greenhouse gas emissions? (Paragraph 4.29 Report by the Secretariat)
The impacts of New Zealand's Emissions Trading Scheme are reported in New Zealand's 6th National Communication on Climate Change. You can find this here: http://www.mfe.govt.nz/publications/climate-change/new-zealands-sixth-national-communication. This report shows that an estimated 9,810.0 Gg CO2-e emissions will be avoided by key policies and measures by 2020. The NZ ETS is assumed to be responsible for the majority of this. However it is challenging to assess with certainty as the impacts of the NZ ETS are difficult to distinguish from other policies. Also, the NZ ETS is a long-term intervention, and its impacts need to be evaluated on that basis.
Additionally, each year the Environmental Protection Authority (EPA) reports on activity in the New Zealand Emissions Trading Scheme (ETS). In 2014, the EPA released three reports: the 2013 Annual ETS Report; ETS 2013 – Facts and Figures and the 2013 Synthetic Greenhouse Gas Levy Report. The reports provide information on how many businesses were in the ETS, how much greenhouse gas they emitted or removed, and give year-on-year comparisons. You can find these reports on the EPA website: http://www.epa.govt.nz/e-m- t/reports/ets_reports/annual/Pages/default.aspx.
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REPUBLIC OF KOREA
PART I: Questions Regarding the Secretariat Report
Page 35 (Para 2.58)
The legislation prescribes the circumstances where an overseas person is required to obtain consent before investing in New Zealand, i.e. acquisitions by overseas persons of sensitive land or an interest in sensitive land; 25% or more ownership or control interest in fishing quota; and any foreign investment that would result in the acquisition of 25% or more ownership or control interest in "significant business assets" (i.e. assets valued at more than NZ$100 million). In its mode 3 horizontal commitments under the GATS, New Zealand is bound to a screening threshold of NZ$10 million.
Question 1
According to the Report, "consent is required for foreign investments when they would result in the acquisition of 25% or more ownership of or a control interest in 'significant business assets'. "Significant business assets" are shares or assets valued at more than NZ$100 million". It is understood that the definition of "significant business assets" is partly based on the value of shares. Could New Zealand clarify whether this definition takes into account fluctuations in the value of shares? If so, how is this done?
Answer
Consent is required under the Overseas Investment Act 2005 ("the Act") where an overseas investor acquires shares in another entity ("the target"), and as a result of the acquisition, the overseas person has a 25% or more ownership or control interest in the target, and The value of the shares, or The consideration provided (i.e. the price paid by the overseas investor for the shares in the target), or The value of the New Zealand assets of the target, including the value of the New Zealand assets of the subsidiaries in which the target has a 25% or more ownership or control interest exceeds NZ$100 million.
The value of the shares is calculated at a particular point in time – the date the overseas investment was given effect – so it is not necessary to take into account share value fluctuations. "Give effect to the overseas investment" is defined in section 6(1) of the Act, and depending on how the transaction is structured, is either the date the agreement to purchase the shares was entered into, or the date the purchase of the shares was settled.
It is unusual for the value of the shares to be the trigger for a transaction to become treated as a "significant business asset" transaction. It is more usual for the other two circumstances (price paid, or value of the New Zealand assets of the target and its qualifying subsidiaries) to be the triggering circumstance. However, including the value of the shares as a threshold figure does provide an anti-avoidance effect, in that it deters the vendor and purchaser from structuring the transaction in a way that an artificially low purchase price is paid.
Page 55 (Para 3.87, 3.95, 3.96)
New Zealand continues to attach high importance to the protection of human, animal, and plant life or health. As a consequence, it maintains a relatively strict SPS regime. "Risk goods" cannot be imported into New Zealand until a comprehensive risk assessment has been completed through the adoption of an "Import Health Standards" (IHS).
Risk goods cannot be cleared for entry into New Zealand unless the risks posed by the goods have been assessed and can be effectively managed. Any risk good that does not meet the biosecurity requirements for import (set out in an import health standard), or which have not been assessed, will not be cleared for entry to New Zealand. Risk goods require a risk analysis to be undertaken before an import health standard can be issued and goods cleared under it.
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Decisions on issuing import health standards are the responsibility of the Director-General of MPI, on the recommendation of a Chief Technical Officer. To date, over 350 IHS have been issued (of which about 90 during the review period). The MPI maintains an online system which provides detailed information on specific IHS by commodity and by country.
Question 2
New Zealand maintains relatively strict sanitary and phytosanitary (SPS) measures. For instance, "risk goods" cannot be imported into New Zealand until a comprehensive risk assessment is done through guidelines in Import Health Standards (HIS). Given that about 350 IHS have been issued to date, there might be risk goods which do not yet have relevant health standards and cannot be cleared for entry into New Zealand. In terms of scientific bases, elaborate on what is taken into account for deciding Import Health Standards (HIS) and how long the decision process takes?
Answer
New Zealand's requirement that an IHS exist for a risk good prior to its importation is consistent with the SPS Agreement and places no unreasonable impediment on trade. New Zealand adopts relevant international standards where these standards would achieve New Zealand's appropriate level of protection.
Requests for IHS are prioritised by assessing importance (criticality to New Zealand), strategic fit (with New Zealand government goals), net benefit (for New Zealand in the longer term), feasibility (of being able to do the work), barriers (whether they can be surmounted), and the amount of work expected. More information is available on the MPI website: http://mpi.govt.nz/importing/overview/import-health-standards/requesting-a-new-ihs/.
There is no set timeline or average time for the development of IHS. The time period involved in the development of an IHS varies, and can, for example, take between 3 months and 3 years. The timeframe for development of a new IHS is dependent upon, but not limited to, a number of factors including the scope of the IHS, the risk assessment required, the nature of the consultation required including the number of interested & affected parties to be consulted, and implementation factors. Information on risk analysis procedures is available on the MPI website at: http://www.mpi.govt.nz/document-vault/2031.
Page 66 (Para 3.177)
An important development, during the review period, was agreement to New Zealand's terms of accession to the revised WTO Agreement on Government Procurement (GPA) on 29 October 2014, following the submission of its final offer. Upon ratification by New Zealand, the GPA is set to apply to procurement of goods, services, and construction works by a list of entities from central and sub-central government agencies, as well as other entities such as state-owned enterprises (SOEs). Ratification of New Zealand's accession to the GPA entails a Parliamentary treaty examination process that is currently under way. The Agreement will enter into force for New Zealand on the thirtieth day following the deposit of New Zealand's instrument of accession to the Director-General of the WTO.
Question 3
Korea welcomes New Zealand's announcement of its accession to the revised WTO Agreement on Government Procurement (GPA) and looks forward to the entry into force of the GPA in the near future. Please provide a brief description on New Zealand's public procurement market value with a breakdown of the central entities, sub-central entities, and other entities as covered by New Zealand's Appendix I offer.
Answer
To date, New Zealand has not collected or maintained information on the value of the procurement covered in its Appendix 1 offer; however, we are able to provide estimated annual values for the total (rather than covered) procurement undertaken by the entities covered in New Zealand's Appendix 1 offer. Expressed in New Zealand dollars, these are as follows:
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Annex 1 – $10 billion Annex 2 – $5.8 billion Annex 3 – $5.8 billion
Question 4
After important amendments were made to the regulatory regime with the passage of the 2006 Telecommunications Amendment Act, further amendments were made through the 2011 Telecommunications Amendment Act. In this regard, what were the main changes in the telecommunications legislative framework, particularly as they pertain to the participation of foreign service providers?
Answer
The Telecommunications (TSO, Broadband, and other Matters) Amendment Act 2011 provides the framework for the Government's ultra-fast broadband (UFB) and rural broadband (RBI) initiatives, and implementing the Government's telecommunications service obligations (TSO) reforms. Amendments to the Act include: Streamlining the administration of TSO instruments; Consolidating the statutory mechanisms for industry funding of telecommunications service and sector development obligations; Establishing a regulatory framework for the enhanced broadband networks that will be developed under the UFB and RBI initiatives with the support of Crown funding; and The introduction of measures to facilitate the structural separation of the incumbent wholesale/retail provider telecommunications provider. There were no changes specific to the participation of foreign service providers. However, as a result of the structural separation of Telecom into two complete separate companies (Chorus and Spark), New Zealand now has a level playing field amongst retail fixed line operators, with no foreign ownership restrictions in the retail sector. Question 5
Could New Zealand explain why Spark New Zealand, a major player in the fixed line market, is exempt, unlike Chorus, from any company specific restrictions on foreign investment?
Answer
Following the de-merger of Telecom into two completely separate companies (Chorus and Spark), some of the previous foreign ownership restrictions that applied to Telecom were transferred to Chorus. This is because Chorus became a wholesale-only network operator controlling strategic infrastructure previously held by Telecom. These are the only specific limitations on foreign investment in the telecommunications sector. Spark, a retailer and mobile operator, has no company-specific restrictions on foreign investment and competes with other retailers that do not have any company-specific foreign ownership restrictions.
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THAILAND
QUESTIONS REGARDING THE SECRETARIAT REPORT
3.2.3.2 Bound tariff
Para. 3.36 (page 45)
Question 1: Could New Zealand inform the progress and timeline of the submission of New Zealand's latest bound schedule in HS2012?
Answer:
New Zealand is currently progressing work on the submission of our latest bound schedule in HS 2012, and will provide this as soon as it has been completed.
3.4.6 Intellectual property rights
Para. 3.185 and Para. 3.190 (page 67-68)
Question 2: Could New Zealand elaborate on the Fair Trading Act 1986, especially on the geographical indication protection and registration process. If a goods is has a geographical indications registered abroad, would that be protected in New Zealand?
Answer:
The Government decided in 2015 to move ahead with bringing the Geographical Indications (Wines and Spirits) Registration Act 2006 ('the GI Act') into force. Further review of the Act has determined that it will require some technical amendments before implementation. There is also a need to develop and promulgate regulations covering the registration procedures and fees. Work on drafting these amendments has begun, with the hope that the amendment Bill will be ready for introduction into Parliament in the next few months. This means the most likely completed implementation date will be in 2016.
Once the GI Act is in force, it will be possible for foreign geographical indications to be registered in New Zealand, but only if an application is made in New Zealand to register that indication, and only if the indication is protected in its country of origin.
Section 33 of the GI Act provides that a breach of the restrictions on use of a registered geographical indication is a contravention of section 9 of the Fair Trading Act 1986. Section 9 reads as follows:
'No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.'
As the GI Act is not yet in force, no geographical indications have been registered in New Zealand. If a geographical indication is registered outside New Zealand, protection in New Zealand is not automatic. A foreign geographical indication, whether registered abroad or not, could be protected from misuse by section 9 the Fair Trading Act, if the geographical name is used in relation to goods or services in a manner that might mislead the public as to the origin of those goods or services. Section 13 of the Fair Trading Act also makes it illegal for a person in trade to make false or misleading representations as to the place of origin of good or services.
In addition to the legislation referred to above, a geographical indication, whether registered abroad or not, could be protected from misuse in New Zealand under the common law tort of passing off, if the plaintiff can demonstrate: (a) it has acquired sufficient goodwill or reputation in the geographical indication in New Zealand; (b) a misrepresentation by the defendant to the public that causes, or is likely to cause, the public to believe that goods or services offered by the defendant are the goods or services of the plaintiff; and
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(c) it has suffered, or is likely to suffer, damage to its goodwill.
Furthermore, a geographical indication identifying spirits, whether registered abroad or not, could be protected from misuse under the Australia New Zealand Food Standards Code. Standard 2.7.5 – Spirits, provides that a geographical indication must not be used in relation to a spirit, even where the true origin of the spirit is indicated or the geographical indication is used in translation or accompanied by expressions such as 'kind', 'type', 'style', 'imitation' or the like, unless the spirit has been produced in the country, locality or region indicated.
Table 3.13 Summary of the protection of intellectual property rights, 2014 (page 68)
Question 3: According to the Table 3.13 of the Secretariat Report, how does New Zealand interpret the clause "other characteristics of goods or services" shown in the exclusion or limitation to trademark protection? Please explain and give examples.
Answer:
Section 18(1)(c) of the Trade Marks Act 2002 states that the Commissioner of Trade Marks must not register - … a trade mark that consists only of signs or indications that may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or of rendering of services, or other characteristics of goods or services.
The purpose of section 18(1)(c) of the Act is to prevent the registration of marks that are descriptive of goods or services or some characteristic of them. These descriptive marks are excluded from registration because, in the words of the OHIM Third Board of Appeal (Global Chiller [2000] ETMR 234):
They must remain available for general use, since competitors have a legitimate interest in employing, without hindrance, in a descriptive manner such indications relating to the very nature of the claimed goods.
Section 18(1)(c) of the Act lists seven specific characteristics of the goods or services that signs or indications may designate, namely "kind", "quality", "quantity", "intended purpose", "value", "geographical origin" and "time of production of goods or of rendering of services". This list is not exhaustive, as evidenced by the concluding "or other characteristics of goods or services".
"Other characteristics of goods or services" would include any characteristic that does not fall within one of the earlier-listed, specific categories, but that is nonetheless descriptive of the goods or services concerned.
Signs that describe the subject matter of a publication or computer programme, for example WEDDINGS for a magazine about weddings, would not be registrable on the basis that they designate an "other characteristic" of the goods.
Question 4: What are the criteria New Zealand uses for considering registrability of book titles and names of cartoons as a trademark? Have they been registered in New Zealand so far?
Answer:
The Trade Marks Act 2012 does not provide any special or particular provisions concerning the registrability of book titles or names of cartons. The Intellectual Property Office of New Zealand apply the general criteria set out under the Act for determining whether a sign is registrable as a trade mark, including the criteria set out under section 18 relating to whether or not a word mark that is a title or name is descriptive (the mark may be refused where for example, it described a well-known fairy tale and/or character) or non-distinctive.
DISNEY ENTERPRISES, INC. have registrations for a host of book titles for a range of goods and services e.g:
752425 SLEEPING BEAUTY
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752430 SNOW WHITE 752435 BAMBI 752442 CINDERELLA 244540-49 HUNCHBACK OF NOTRE DAME 665000-4 WINNIE THE POOH
THE SAUL ZAENTZ COMPANY dba TOLKIEN ENTERPRISES have registrations for a host of book titles for a range of goods and services e.g:
773111/13-5; 777149-52; 782460-62 The Hobbit 306541-59 The Lord of the Rings
It is also possible to register a cartoon image as a trade mark. For example, DISNEY ENTERPRISES, INC. have registrations for various cartoon images for a range of goods and services e.g:
33845 Mickey mouse in class 9 for motion-picture films prepared for exhibition 33849 Mickey mouse in: o class 16 for books of all kinds, including copying, sketching, painting, story, and rag books; pictures, photographs, drawings, posters and postcards; pattern and other cards; printed publications and cartoon strips, and o class 28 for playing cards.
4.2.2.2 Export measures
Para. 4.20 (page 75)
Question 5: As New Zealand notified the Zespri Group Ltd as a state-trading enterprise and Kiwifruit Export by the Zespri Group Ltd. appears to be a quasi-monopoly on exports. Could New Zealand indicate whether the implementation of Zespri complies with Article 17 of GATT 1994?
Answer:
As provided in New Zealand's 2014 notification under Article XVII: 4(A) of the GATT 1994 and paragraph 1 of the Understanding on the Interpretation of Article XVII, the current export management arrangements for the New Zealand kiwifruit sector comply with Article 17 of GATT.
4.2.3 Domestic support
Para. 4.24 (page 76)
Question 6: Could New Zealand explain more details about the criteria of payment calculation, the total value of the payment in this measure and the criteria of eligibility kiwifruit growers who received these payment?
Answer:
Rural Assistance Payments provide help to farmers/farming families in need following adverse climatic events, natural disasters or biosecurity incursions. Depending on the nature of the event, payments can be available for up to 12 months for qualifying farmers/farming families. Eligibility is reassessed monthly.
To be eligible to receive a Rural Assistance Payment a farmer/farming family must meet specific criteria including: being a New Zealand citizen or permanent resident; having a primary industry business as their primary income source, and not producing sufficient income to meet essential living expenses; an income threshold test; an off-farm cash asset threshold test.
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During the Kiwifruit industry's recovery from the bacterial disease Psa, Rural Assistance Payments were available for up to 12 months from the application date, with applications open from December 2012 to December 2013. A total of 3 kiwifruit growers (out of approximately 2,600 growers) submitted applications with all obtaining different levels of support. A total $14,614.61 was paid during this period.
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